What is an IVA or Individual Voluntary Arrangment?
An IVA is a formal agreement with your creditors that can allow you to repay only a percentage of your debt by way of affordable monthly payments (usually for 60 months).
At the end of the 60 months any remaining debt is written off.
To find out more on how an IVA can help fill in the IVA contact form on the right.
Here are some more key facts about IVAs:
- You may only have to pay back a percentage of your debt
- You only have to make one payment each month and this monthly payment is based on your available disposable income - what you can afford
- An IVA is legally binding which means that your creditors can't change their minds once they've agreed to it and cannot contact you at all once you have entered into the IVA
- Once the IVA is in place your creditors cannot bring any other action against you as long as you maintain your agreed monthly payments
- The IVA will usually be registered with the credit reference agency for a 6 year period depending on the credit reference agency's policy
- If your income increases or you inherit some money, this will be taken into account and payments to the IVA will be altered accordingly
- With an IVA you can operate a "normal" bank account as long as it does not have an overdraft facility
- With an IVA there won't be any negative publicity in the local papers
- With an IVA you would keep control of your assets. Your assets do not automatically vest in the Supervisor.
- Having an IVA does not affect the availability to hold public office
- An IVA does not affect your professional status
What Are The Advantages of an IVA?
- With an IVA you only pay back an agreed percentage of your debts
- Whilst an IVA is in place your creditors are not allowed to harass you
- With an IVA interest on your debts is frozen which means your debt will not keep growing
- An IVA won't affect your professional status or ability to hold public office like bankruptcy does
- Entering into an IVA means you can continue to work or trade (Self Employed) without it affecting your business
Do creditors have to accept my IVA?
A decision to accept or reject an IVA is made by a creditors voting at a creditors meeting.
You will require 75% of voting creditors to accept your IVA at that meeting. If less than 75% by (debt value) vote to accept the IVA, the IVA will fail.
What Are The Disadvantages of an IVA?
- If you don't stick to the terms of your IVA then the Insolvency Practitioner or your creditors can make you bankrupt
- If your circumstances change which means you can no longer afford your monthly payments your IVA may end if the Insolvency Practitioner is unable to convince the creditors to accept a new varied agreement
- If you own a property and you are able to remortgage as there is sufficient equity you will be asked to release that equity in the fouth year of the arrangement (normally anything above 15% to 25%) If the IVA is a single proposal then you are only obliged to release your share of any equity from a jointly owned property.
- During the term of the IVA the debtor will be subject to financial restraints on expenditure. Income and expenditure will be reviewed on an annual basis.
IVA Fees
In an IVA you pay one affordable monthly payment for the duration of the arrangement (normally 60 months). In return your creditors, (people you owe money to) agree to write off the debt you can't afford to repay. Our fees are taken from the payments that you make. There are no additional fees or charges. Fees may vary, however they will be subject to a maximum of 35% of total realisations.
All the costs associated with your IVA are included in the monthly payments you make in to it.
Costs may vary however you will receive a breakdown of costs prior committing to an IVA. Detail of the fees will be set out in the letter of engagement from us, to you the client, before you agree to proceed.
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