Individual Voluntary Arrangement
An Individual Voluntary Arrangement (“IVA”) is a legal agreement between you and your creditors. It was introduced as part of the Insolvency Act 1986 as an alternative to bankruptcy.
An IVA will involve a proposal being made to your creditors providing them with details of your assets, your debts and how much you can afford to pay each month. The proposal for the IVA is prepared by you with the assistance of an insolvency practitioner acting in the role of Nominee.
An IVA will typically be proposed over a 5 year period with contributions made at an affordable level on a monthly basis. If you are unable to afford a monthly payment it may be possible to propose an IVA based on a single lump sum payment sourced from the sale of an asset or from a third party, or the proposal may be based on a combination of the two.
Any assets you own, including your property, can be excluded from the IVA with the agreement of your creditors, although it may be a condition of creditors accepting the IVA that you attempt a re-mortgage towards the end of the term and pay the proceeds into the IVA.
If your creditors agree to your proposal by a majority of 75% or more in value the IVA is then approved, creditors who are included are bound by its terms and the Nominee becomes the Supervisor of the IVA, whose role is to ensure that the terms of the proposal are properly carried out. As long as you make all payments and comply with all reasonable requests of the Supervisor the IVA will complete at the end of the agreed term and you will no longer have anything outstanding to those creditors that were included.
How do I Apply for an IVA?
When you contact us we will chat about your current situation, including an assessment of your income, outgoings, assets and debts.
This will tell us if an IVA is a suitable option for you.
If an IVA is suitable the next step is to draw up a formal proposal for consideration by your creditors.
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?
Which Debts cannot be included in an IVA?
What are the Benefits of going into a IVA (Individual Voluntary Arrangement)?
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.