Individual Voluntary Arrangement (IVA)
An IVA has a fixed term of 5 years. After this time any unaffordable unsecured debts will be written off.
If your debt level is £7,000 or more and you can afford £100 per month an IVA may be a good option for dealing with your debts, you will need to speak to an IVA advisor who is willing to act on your behalf. Often, the initial work is done by an IVA advisor with an insolvency practitioner supervising the final arrangements.
Why should I consider an IVA?
An IVA reduces debt by up to 70%.
You only repay what is affordable after taking into account your personal circumstances.
An IVA allows you to be free from debt in 5 years.
In 60 months you will be debt free, the rest is written off. This is dependent upon approval of 75% (by value of the debt) of your creditors, and provided you maintain the payment schedule.
An IVA Stops freezes interests on your debts.
You will stop paying interest on your debts at the point in time of your IVA proposal being approved.
An IVA Stops harassment.
Creditors and Debt Collectors can’t legally pursue debt repayment once an IVA is in place.
An IVA avoids bankruptcy
An IVA means you reach an agreement with your creditors whereby they cannot bankrupt you if you maintain the agreed IVA payments. Bankruptcy means you lose control of all your assets, including your home.
One of our advisors will help you put together a plan for sorting out all of your non-priority debts. The plan, called a proposal, will be based on information you give to the advisor. In the proposal, you will agree to repay the people you owe money to (your creditors), either in part or in full, over a certain period of time. This is usually a period of five-seven years.
If necessary, the IVA advisor can ask the court to make an interim order. This prevents your creditors from taking action while your proposal is being prepared. This can help if a creditor is threatening to take action against you, such as making you bankrupt.
The IVA advisor will prepare a report for the court, including their opinion on whether the proposal will work. They will call a creditors’ meeting where your creditors will vote on whether to accept the proposal.
If enough creditors vote in favour, the proposal is accepted
How does an Individual Voluntary Arrangement (IVA) work?
Step 1 – your first call to us
Complete the form on the homepage for free call back. We will go through your finances with you to assess your eligibility for a Debt Management Plan. We do this for two reasons, first is that an IVA can take 6 weeks or more to process and if we get you started on a DMP, we will make things easier for you in the short term. The second reason is that there is no guarantee that an IVA will be accepted by your creditors, so in case it is not agreed, it is sensible to have a back up plan.
Step 2 – your IVA proposal
On your initial phone call, as a result of the DMP assessment, we will also assess your basic eligibility for an IVA and, if appropriate, pass you onto our IVA assessment team for a full assessment.
If we feel that an IVA may be appropriate for your circumstances, we will send you out an application form and begin drafting your IVA. We will keep in close contact with you and your creditors during this period in order to make sure that the information is correct.
Step 3 – meeting of creditors (MOC)
When we have drafted your proposal, we will send it out to your creditors so that they can consider it. We will then arrange a “by proxy” meeting where each of your creditors can vote by post as to whether to accept your IVA proposal. The meeting is not normally at the meeting, but you may if you wish.
Step 4 – your IVA has been approved
In order for your IVA to progress 75% of your creditors will need to agree it. Hopefully, as it does in 75% of cases, your IVA will be accepted, after which your case will be passed to our supervision department. This is where your IVA will be looked after for you. A case handler will be appointed as a dedicated contact should you have any problems or need to ask questions.
The final IVA stage is when your records are updated on the credit reference agencies to show you completed your IVA successfully and all debts are satisfied. At this stage you will no longer be in debt. You will have documentation proving the I.V.A has finished and of course, you’re able think about repairing your credit rating.