Tackling your debts

Can I get an IVA if I'm retired? Part 1

Posted 17 October 2015

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Heading into retirement can be a difficult process, especially if you're concerned about your finances. An IVA may be a suitable way to make sure your debts don't get the better of you, but there are a few things to remember.

We can’t always control what happens to us in life and sometimes circumstances mean that we find ourselves in financial difficulties. A death in the family, illness or divorce can launch you into a situation that you weren’t financially ready for. If this is you, and you’re retired, it’s understandable that you might be worried about how you’re going to tackle your debts without that income from work. In this two part blog, we'll look at whether an IVA is suitable for you once you've retired. 

Thankfully, it’s sometimes possible to go on an Individual Voluntary Arrangement (IVA).  But, whether it’s suitable for you or not would depend on your circumstances, so let’s have a look at when an IVA might be the right step for if you’re retired and struggling with your debts.

What is an IVA?

An IVA might be suitable if you have unmanageable unsecured debts (like loans or credit cards), and you don’t think that you can pay them off in a reasonable amount of time. It would change the payment arrangements you currently have with your lenders so that as well as having enough money to live off each month, you’d also contribute to repaying your debts. And, after a certain length of time, they would be written off (normally after five to six years).

If this doesn’t sound right for you, then don’t worry, there are other debt solutions available here.

However an IVA is a form of insolvency and not an easy option. It would mean that you’ll have to make changes in your lifestyle until your IVA finishes. But, it can provide a real lifeline, if your debts have become completely unmanageable. If you are in the later stages of life and want to look forward to a date that you could be debt free, this could be the right solution, as long as you meet certain criteria.

Can I have an IVA?

There is no strict age restriction when it comes to starting an IVA, so you wouldn’t be rejected just on the basis that you’re retired. We’d have a look at the money coming in and out and take into account what you need for living expenses. After everything has been accounted for, the money that’s left is called your disposable income, we’d work out what you could afford to pay into an IVA from that left-over portion.

We do feel it's necessary to point out that, while debt solutions are a useful way to help you manage unmanageable debts, they have both pros and cons, which you need to think about carefully before making any decisions about how you'd like to move forward. Read more about IVAs, here.   

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.