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 Individual Voluntary Arrangement?

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 Individual Voluntary Arrangement?

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 Individual Voluntary Arrangement?

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

Which Debts cannot be included in an Individual Voluntary Arrangement?

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

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

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

How Does An Individual Voluntary Arrangement Affect My Credit Rating?

Once in an Individual Voluntary Arrangement, 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.