Individual Voluntary Arrangement

An Individual Voluntary Arrangement (IVA) is a legal agreement between you and those you owe money (your creditors). It was introduced by the Government, as part of the Insolvency Act 1986, as an alternative to bankruptcy.

You agree to pay off a percentage of your debt over a given period of time, by means of affordable repayments (normally 60 months) but over a maximum of 5 to 6 Year Period (In England and Wales).

Your debt only then is, once consolidated into one affordable monthly payment or a payment structure that suits you personally.

You are then debt-free within five years, as any outstanding debt included in this IVA no longer exists.

However, once approved, your creditors stop pursuing you for your debts, and additionally, you will know precisely when you will be debt-free.

How do I Apply for an IVA?

How do you apply for an IVA? When you contact us we will chat about your current situation, including an assessment of your income, outgoings and your debts. This will tell us if an IVA is a good option for you.

Should an IVA be suitable – the next step is to draw up a formal proposal for consideration by your creditors.

If the proposal is approved by 75% of the creditors by value of debt the IVA is accepted and all creditors are bound by its terms. All debts are frozen so no more interest or changes can be added.

What Happens when I am in an IVA?

Creditors must not chase you for payments for any of the included debts. So, no more letters, phones calls nor threats of legal action.

Provided you maintain payments – unpaid debt is written off at the end of the IVA, which typically lasts 60 months.

Your expenditure is expected to keep within reasonable guidelines – but you won’t be asked to live in poverty.

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Which Debts can you include In An IVA?

Most debts can be included in an IVA and be subject to negotiated repayment and include: –
Loans & Overdrafts
Store & Credit cards
Benefits over payments
HMRC & Council tax arrears
Debts with a Court Judgement
Rent, Gas and Electricity arrears
Catalogues & Buy now – pay later agreements

Which Debts cannot be included in an IVA?

Student loans.
Magistrates fines.- Speeding fines etc.
Court Fines.
Car finance secured.
Child maintenance or Child Support arrears.
Secured Loans.

What are the Benefits of going into a IVA (Individual Voluntary Arrangement)?

Once your IVA has been accepted, you could benefit from:
Lower repayments – Repayments to creditors are based on what you can afford – not how much you owe.
Debt forgiveness – Once you have made the agreed contributions any remaining money owed is written off.
A sense of control – An IVA allows you to regain control of your debts and work towards debt freedom
Debts cannot increase further – Frozen interest and charges so that your debts do not increase.
Legal protection – Creditors cannot pursue you for their debt or take legal action.
Knowing when you’ll be debt free – A fixed agreement usually lasting 5 years, after which any remaining unsecured debts will be written off.
Home is protected – An IVA can help safeguard your property and ensure future affordability even after the IVA.
Stress reduced – You’ll be less stressed knowing IVA will stop contact from your creditors and your payment are affordable
Avoidance of Bankruptcy – An IVA enables you to continue to trade if you are self-employed or have a trading business.
Better able to afford other financial commitments – An IVA can catch unknown debts such as unpaid tax or overpaid tax credits.

How Does An IVA Affect My Credit Rating?

Once in an IVA, you may experience difficulty, accessing short term credit. However, you possibly may obtain credit for personal household goods and services.

If you run your own business, you may access credit for business goods and services. However, higher interest charges may apply. So take care not to increase your debt.

Being in an IVA is recorded in The Insolvency Register.