IVA Debt Advice (Call 0800 138 2299)
1: What is an IVA?
Good question! IVA stands for "Individual Voluntary Arrangement" and it is actually a legal process introduced as part of the "1986 Insolvency Act".
It allows a person struggling with debt the opportunity to make a formal proposal to their creditors in order to clear their debt.
The purpose of an IVA proposal is to demonstrate to creditors that it would be of greater benefit to themselves and the debtor, in comparison to the debtor being made bankrupt.
A creditors meeting is held and if the proposals being made are accepted by the required majority of creditors then they become legally binding on all creditors notified of the proposal. Once accepted, creditors have no alternative but to stop any further interest and charges accruing on the outstanding debts. If you qualify for an IVA (call 0800 138 2299 to find out!), this means...
* You're GUARANTEED debt-free in 60 months
* It wipes off a substantial amount of unsecured debt
* It allows one affordable monthly payment
* All interest FROZEN and charges STOPPED
* Tenants & Homeowners are able to apply
* It relieves pressure and you regain control of your LIFE
Upon the successful completion of the IVA the debtor will be considered debt free even though they may not have actually paid off all of their debts in full.
Any outstanding balances are written off (known as a "composition of debts") and the debtor is then free to make a fresh financial start.
2: What is an IVA?
Because of the costs involved, it is only practical for people whose debts exceed £15,000. If your total debts are less than this, the options for you will include:
* A consolidation loan
* A re-mortgage
* A debt management programme
* Bankruptcy
Each of these options has different implications. For a free consultation on the best way forward in your own individual circumstances, call 0800 138 2299 now.
3: Will I lose my house?
No. But if you have equity in your house then this will be taken into account at some time during the arrangement (usually at the end).
If there is a joint owner of the property and this person is not party to the debts in the arrangement then their share of the equity does not have to be included in any offer to creditors.
4: Can I stay in business?
The Good News is: "Yes". Unlike being declared bankrupt, there's no limit on your business activities.
5: I am a professional person-will it affect my position?
Normally, not at all. People from all walks of life are eligible to enter into an IVA with their creditors without prejudicing their employment.
6: Will it become public knowledge?
No, it is very confidential. Only your creditors will be aware of your position.
In fact even your spouse needn't know (although we would normally advise you to tell them and so clear the air: It can be very hard living with a secret like this).
7: How long does an IVA last?
An IVA normally lasts for five years but this time can become shorter depending on individual circumstances.
8: Which creditors can be included in an IVA?
Creditors that can be included are:
* Banks
* Finance companies
* Credit, store and charge card companies
* HM Customs and Excise (VAT)
* Inland Revenue
* Student loans
However, you cannot include your mortgage, hire purchase, fines, debts incurred through fraud, maintenance/child support arrears.
9: Can I enter into an IVA if I have already received a Statutory Demand?
Yes, if the Official Receiver considers that an IVA is more appropriate.
10: Can I obtain an IVA if a Bankruptcy Order has been made against me?
Yes. It is possible to annul a bankruptcy in favour of an IVA.
11: What happens if I don't keep up the payments on my IVA?
If you default on your payments, the supervisor of an IVA can initiate bankruptcy proceedings against you.
12. What happens once I finish paying my IVA?
At the end of the process the Insolvency Practitioner will issue you with a 'Statement of Completion', typically within 3 months of the final payment. The Insolvency Practitioner will also send a copy of this to the Insolvency Service so that they can amend their records. Then you're home-free.
13. Can I enter an IVA if I already have CCJs against me?
You are not prohibited from entering into an IVA if you have County Court Judgment's against you so yes, you can.
14: Does it make a difference if I am a homeowner?
It makes no difference whether you are a tenant or homeowner or if you are still living with your parents. However equity in a property will need to be disclosed.
15: Do I have to tell my partner?
You do not have to tell your partner if you are entering into an IVA but it is more realistic to think they will probably find out at some stage. Homeowners with joint mortgages will need to disclose details to their partners in case of a future re-mortgage.
16: Does an IVA cover all of my debts?
An IVA can only cover your unsecured debts and arrears.
17: What is the difference between a "secured" and "unsecured" debt?
A secured debt is a debt secured against an asset that you own. Typical secured debts will be a mortgage, a secured loan, a car loan, etc.
An unsecured loan is any loan not secured on an asset, such as a bank overdraft, a personal loan, a credit card, store card, etc.
Here's the final part of our guide. Please feel free to follow the feedback instructions at the bottom of the page (it'll help us make our service even better in the future).
18: Do creditors have to accept an IVA?
The decision to accept or reject an IVA is made by your creditors at a creditors meeting. You need to have 75% of the value of those that vote accept the offer being made for the IVA to go ahead. If this figure is not achieved then the IVA will fail.
19: Can an individual creditor refuse to accept an IVA?
Yes, but it will only have an adverse effect if that creditor has more than 25% of the value of those creditors voting at the creditors meeting. If they do not then they become bound by the majority vote and have to accept the arrangement by law.
20: Will the IVA prevent my creditors taking further recovery action?
Yes. Once the IVA is in place, you are protected from further recovery action by your unsecured creditors.
21: What if my circumstances change?
If you are unable to maintain repayments because of changed circumstances, your supervisor in the IVA can request a variation to
reflect your new circumstances. Likewise if you have a windfall you will be obliged to tell your supervisor.
22: Can I cancel the IVA once it is set up?
No. An IVA is a legal process and, once it is set up, you cannot just cancel it if you change your mind.
23: What happens if I just stop paying into the IVA?
If you fail to keep to the arrangement, your supervisor in the IVA has the right to file for your bankruptcy. So - keep up the payments!
24: How long does it take to set up an IVA?
It takes typically between 8 and 12 weeks to set up an IVA.
25. If I am a homeowner, will I have to release equity in my home into the IVA?
Almost certainly you will have to release equity in your home into the IVA, usually as part of the final settlement of the IVA.
26. Will the IVA affect my credit rating?
You should expect that your credit rating will be adversely affected by going into an IVA. Once the IVA is complete, you may be able to borrow again. However, it may take some time for your credit rating to repair as it will be seriously impaired. Information regarding your IVA (if approved) will remain on your file for up to 6 years after its completion.
27. Will the IVA prevent my creditors taking further recovery action?
Yes. Once the IVA is in place, you are protected from all further recovery action by your unsecured creditors providing you agree to the terms of the arrangement.
28. Is an IVA my only option?
It may or not be when you speak with a debt advisor they will discuss all of your options
29: What happens if the IVA is not approved?
You should still be eligible for an informal debt-management programme. We could still reduce your monthly payments to a more affordable level and we can usually get the interest frozen or reduced.
*Individual Voluntary Arrangement - Conditions Apply: Subject to eligibility, debt write off applies only where an IVA is adhered to and at the end of 60 months This relates to unsecured debts that were included in the IVA.. Alternative solutions may be offered. Failure to adhere to an IVA can result in bankruptcy. Homeowners may be required to remortgage in the 4th year of the IVA. It is a formal legal agreement supervised by the Insolvency Practitioner and will seriously affect your credit rating for up to 72 months after completion. Fees Apply
That's it!!
You now know everything you need to know about IVAs.
If you think this may be the right course of action for you, we are here to help.
Call us Now in complete confidentiality on
0800 138 2299
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