What is an IVA?

An Individual Voluntary Arrangement is a scheme created and ENDORSED BY THE GOVERNMENT. Known as an IVA, it is a very popular way for any individual who qualifies to repay their debt at an affordable amount per month but with a guarantee from creditors that debt will be repaid in under 60 months from the start. You can WRITE OFF UP TO 70% OF YOUR DEBTS WITH AN IVA!

Any amounts outstanding are written off. If you have agreed personal debt and can't afford to repay due to unforeseen circumstances and are unable to attain any further credit to clear your debt, this could be THE BEST SOLUTION FOR YOU!

How the Process Works

Once a decision has been made that an Individual Voluntary Arrangement (IVA) is right for you, you will be asked questions regarding your current financial situation. Based on the information you have given, a repayment amount will be agreed with you. Once proposals have been drawn up you will need to check and sign these and return them to your Insolvency Practitioner(IP).

An application may then be made to the court for an Interim Order. Once this is in place, no creditors will be able to take legal action against you. A creditor meeting will be arranged to which you should attend.

For an Individual Voluntary Arrangement (IVA) to be approved, creditors will be called upon to vote either for or against the arrangement. If only one creditor votes "for" the Individual Voluntary Arrangement, the Individual Voluntary Arrangement will be approved. However, if only one creditor votes against the Individual Voluntary Arrangement and they represent less than 25% of your total debt, the meeting will be suspended for a later date and other creditors who did not vote will be called upon for their vote.

If the creditor who voted against the Individual Voluntary Arrangement represents more than 25% of the total debt you owe the Individual Voluntary Arrangement will fail. This is because an Individual Voluntary Arrangement will only ever be approved if 75% in monetary value is voted for. If any of the creditors don't vote, it is assumed that they will vote FOR the Individual Voluntary Arrangement.

Some IVA Frequently Asked Questions

Q: How much per month will I have to pay ?

A: An advisor will go through your income and outgoings and work out your net disposable income you can afford per month after you have paid your essential household bills , this is the amount you will pay for a period usually 60 month ( 5yrs ).

Q: Will my home be safe?

You will not usually have to sell your property when in an IVA. If you do own your home, you need to take reasonable steps at the end of the IVA to make any equity available to your creditors (usually by re-mortgaging). This requirement is also true for bankruptcy, except that bankruptcy often means you do have to sell your home.

Q: What if my creditors don't agree?

At least 75% of votes (in value) at your creditor meeting must be in favour of your IVA proposal. Creditors can suggest modifications to your proposal and you can choose whether to accept them or not.

If your creditors don't vote in favour you will still have the option of an informal arrangement with your creditors, or of bankruptcy.

Q: Do I have to pay any costs?

We don't charge you any fees since these are agreed with and paid by your creditors as part of the IVA. Providing you keep to the agreement for five years, any debt you can't afford to repay will be written off by your creditors. In summary, you pay only the affordable monthly amount you and your creditors agree to under the terms of the IVA.

Q: Will I ever be able to get credit again?

Yes. During your IVA you have agreed not to obtain further credit. When your IVA is completed, it is likely to remain on the credit reference databases for a further year. During this time you will probably still find credit difficult to obtain. However, when your IVA concludes successfully, your credit rating is likely to be repaired more quickly than if it fails.

Generally, you are better able to obtain credit once your debt problem has been resolved. When considering entering into an IVA, the last thing you should be thinking about is more credit! There are many lenders who will look at your ability to pay, and successful completion of an IVA, rather than just your credit file.

A successfully completed IVA is an excellent example of a good payment history.