Individual Voluntary Arrangement (IVA) Help and Information
If you are struggling to repay the debt that you owe, then an IVA could be used repay as much of the debt as possible in a more sensible way, in return the creditors will stop all interest charges, any further action against you and end up writing off a percentage of the debt.
If you have at least £10,000 of unsecured debt owed to two or more different institutions; but have a regular income and could afford to put at least £100 a month into an IVA, then you are in a position to be completely debt free after 5 years.
An IVA also allows your creditors to receive more money back than they would if you were to declare yourself bankrupt. An IVA can also act as a safeguard to losing your home, which is particularly important if there is equity in the property, as you would lose this in bankruptcy.
What is an IVA?
You will be required to make a monthly payment over a 60 month period and after that whatever debt is left will be totally cleared, leaving you 100% debt free.
An IVA is available for individuals, sole traders and partners who are struggling with their debts. An IVA is particularly used by individuals who own their own property and want to avoid the possibility of losing it through bankruptcy.
What Happens in an IVA?
Once you have decided that an IVA is right for you, a debt advisor will review your financial status and work out how much you will be able to offer your creditors
(this amount will be tailored to your personal circumstances). If the debt advisor agrees that an IVA is right for you, a statement of affairs will be drafted (income, expenditure and your debts) to be passed to an Insolvency Practitioner.
Is an IVA Right For You?
An IVA can be tailored to your financial circumstances, your payments in an IVA will all depend on how much debt you currently owe and how much you can afford.
A debt advisor will review your finances and work out a monthly repayment that is fair to both you and your creditors. Your employment will not be affected by and
IVA Pros and Cons
An IVA will enable you to reduce your debts to one affordable monthly sum (based on your budget) which is usually fixed over a 60 month period.
Monthly repayments can be as little as £100 per month, and after you have completed the IVA, whatever debt is remaining will be cleared, which could be up to 75%,
An Individual Voluntary Arrangement gives a debtor the chance to avoid bankruptcy by making an agreement with their creditors to pay off a percentage of the debt over a 5 year period. This is extremely useful if you have assets to protect and are simply not in a position to file for bankruptcy.
Your repayment structure for the IVA is calculated through an analysis of your income and expenditure, and once agreed, forms part of a legally binding contract. All creditors are informed and providing the creditors that represent more than 75% of the debt agree, then the IVA will go ahead.
Unlike bankruptcy, in an IVA there’s no risk to your career (such as accountants and estate agents) and you don’t risk losing your assets.