What is an IVA?
An Individual Voluntary Arrangement (IVA) is a solution that’s designed to help people repay their debts at a rate they can afford. It is a legally binding agreement between you and your lenders and providing you keep to the terms of the IVA, lenders will agree to write off any remaining debts that still exist at the end of the IVA period, which typically lasts for 5 years.
Interest and charges will be frozen and lenders will no longer be able to contact you or petition for your Bankruptcy.
An IVA is available if you reside in England, Wales and Northern Ireland.
Does an IVA cover all of my debts?
No, only unsecured debts – debts that are not secured against your property or something you own – can be included in an IVA.
These would include debts such as credit cards, overdrafts, personal loans, payday loans, store cards and catalogue accounts.
How long will the IVA last?
Providing you keep to the terms of the IVA, the Arrangement will typically last for 5 years.
How much does an IVA cost?
If an IVA is the right solution for you we will process your application free of charge. We will then introduce you to an Insolvency Practitioner who will continue the application process for you.
All costs associated with your IVA are included in the payments you make in to it every month. Your Insolvency Practitioner will tell you what these specific fees are before you commit to an IVA.
What happens the interest and charges while the IVA is being set up?
Interest and charges are frozen once the IVA starts – not during the set up of the IVA.
Will an IVA stop my creditors taking further action?
Yes. Once the IVA is in place, you are protected from all further recovery action by your unsecured lenders – providing you keep to the terms of the arrangement.
If a lender tries to take further action while the IVA is being set up, you can apply to the courts for an Interim Order to stop this until you know the outcome of your application.
Do lenders have to accept an IVA?
Once we have all the details regarding your financial circumstances, your case will be transferred to an Insolvency Practitioner for further assessment.
Based on this information, the Insolvency Practitioner will draft a proposal which will be presented to your lenders.
For an IVA to be approved and interest and charges to be frozen, the proposal will need to be voted on and approved by lenders representing 75% of the value of your debts.
If 75% approval is not obtained, then the IVA proposal will fail.
Will it affect my credit rating?
If you have already made late payments towards your debts or missed them altogether, then your credit rating could already be affected.
If you enter an IVA, you will not be repaying the amount originally agreed with your lenders, which means your credit rating will be affected for six years from the start of the Arrangement. Once all your debts are cleared, you will be able to focus on rebuilding your credit rating once again.
Can I cancel the IVA once it has been set up?
You may cancel your IVA application. However, once the IVA begins and you have started making the repayments, you cannot cancel the IVA as it is a legally binding agreement. If there are changes to your financial situation, you should speak to your Insolvency Practitioner who will be able to advise you on what to do next.
What happens if I stop paying my IVA?
If you fail to keep to the Arrangement and the IVA falls so much into arrears that nothing can be done to bring it back on track, then the IVA Supervisor will issue a Notice of Termination. This will formally bring an end to the IVA.
If the IVA fails then the lenders will be able to chase you for the remaining debt, as you will no longer have the protection afforded to you by the IVA. There is also the risk that lenders or the Insolvency Practitioner could petition for your Bankruptcy.
What happens if my IVA is not approved?
If the IVA is not approved we will do all we can to help you find an alternative solution, such as a Debt Management Plan.