An Individual Voluntary Arrangement or IVA will allow you to repay your debts at a lower rate over a set period
In a nutshell An Individual Voluntary Arrangement (IVA) is a form of debt settlement. It allows you to repay your debts over a period of time, after which any remaining amounts owed will be written off.
An IVA is a legal debt settlement agreement which has one of two forms. The first will include a one-off payment to clear a section of your debts, while the second runs over a period of either 60 or 72 months (5 or 6 years respectively).
You should always seek Advice about setting up an IVA and learn about IVA Pros and Cons from accredited experts prior to deciding on an IVA debt settlement.
What debt problems is this debt help suitable for?
An IVA debt settlement is the best debt help for those struggling with so-called ‘common debts’, including: overdrafts, personal loans, catalogue debts, council tax arrears, hire purchase debts, mortgage shortfalls, credit and store cards, and money owed to HMRC (e.g. income tax or National Insurance contributions).
Like other debt solutions, an IVA does not allow you to pay off: student loans, Magistrates’ court fines, certain forms of car finance, and child maintenance/child support arrears.
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Advantages of Individual Voluntary Arrangement (IVA)
- You won’t need to sell your home.
- An IVA debt solution is completely tailored around your finances and will create a plan that involves repayments that you can genuinely afford.
- Once the debt settlement IVA agreed, your creditors are no longer allowed to contact you (save for sending you statements).
- There’s no upfront payment required, which makes this form of debt help accessible for all who are eligible.
Disadvantages of Individual Voluntary Arrangement (IVA)
- While this type of debt assistance doesn’t require you to sell your home, you may need to release equity from it.
- This form of debt help is registered on your credit file and will negatively impact your credit score.
- You won’t be able to secure more than £500 credit throughout the course of your IVA.
Our debt agency provides the best bad debt help services for those considering an IVA debt settlement. Talk about possible debt solutions today with our debt advisors.
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FAQs – Individual Voluntary Arrangement
How do I propose an IVA?
Will doing an IVA prevent me from getting credit?
Is an IVA recorded publicly?
What assets are included in an IVA?
What assets are excluded from an IVA?
What criteria do I need to meet to be deemed insolvent?
Will I have to meet the Insolvency Practitioner?
Can I repay my IVA early?
When is the interest and other charges on my debts frozen?
What happens if I miss a repayment on my IVA?
Can my partner and I have a joint IVA?
Can someone else pay my IVA?
Can I decide to terminate my IVA after it’s been set up?
What happens if I don’t meet my legal obligations under the IVA?
The IVA process begins with the creation of a Proposal. This is managed by a Licensed Insolvency Practitioner, who will act as what is known as the ‘Nominee’. You’ll need the following details:
• Name and contact for all of those you owe money to
• A breakdown of your monthly income and expenditure
• Information about your home – such as its value and any remaining lending on it
• A breakdown of your assets that have sizeable value
During your IVA there are restrictions on accessing credit. You will need written permission from your Insolvency Practitioner if you wish to borrow further funds.
Your IVA will be recorded on your credit record. This will affect your credit worthiness for a minimum of six years.
The exact details of your IVA won’t be disclosed, however IVAs are recorded on a central registry which any member of the public can search online.
All assets that could be sold or that would normally be included within a bankruptcy will likely be included in the IVA (e.g. property, savings, valuable jewellery etc.).
Creditors won’t usually be allowed to include the following assets in the IVA (although you yourself may choose to include them):
• Tools of your trade
• A vehicle required for you to work
• Your pension
• An award of compensation for personal damages e.g. for pain and suffering, in a personal injury action.
In order to qualify for an IVA you must be technically insolvent, which means that:
• Your liabilities outweigh your assets
• You’re not able to pay debts that are due
No, it’s not necessary. National Debt Help can arrange your IVA exclusively through corresponding by phone and email.
If you have a lump sum that could repay the entirety of your IVA you’re free to settle it early. By repaying early, you may also be in a position to negotiate a slight discount from the total you would have paid if the IVA ran to its full term.
Interest and charges are frozen once the IVA is set up.
If you miss a repayment to your IVA you must contact your Insolvency Practitioner (IP) immediately. Explain to them why you’ve missed the payment, and request permission to make a late payment. If you have a reasonable explanation, permission may be granted, but you should endeavour to make all future payments on time. If your circumstances have changed, you Insolvency Practitioner (IP) may be able to change the terms of your IVA to make it more affordable.
If you don’t pay and don’t get in touch, further action could include your Insolvency Practitioner (IP) ending the IVA or applying to the court for bankruptcy proceedings to be issued.
Yes, and it makes sense to do so if you both have debts and want to pool them under the same IVA. However you should understand that both people are jointly responsible for repaying a joint IVA.
No one else is responsible for paying your IVA, however third-parties are free to pay the IVA should they want to do so of their own accord.
Yes, but your will have to find a solution to your debts, and you could be forced into bankruptcy by one of your creditors. It’s worth noting that you needn’t terminate your IVA if you’re simply struggling to pay. Speak with your Insolvency Practitioner in the first instance, they’re there to help you.
An IVA will be terminated if you fail to meet your legal obligations under the agreement. Once this happens you’ll be provided with a set period of time in which to resolve the breach. If the IVA isn’t resolved your creditors will be notified that the IVA is terminated, and they’ll proceed with their own legal action.