IVA FAQs

IVA Questions & Answers

1. What are the implications of an Individual Voluntary Arrangement?
2. Can I write off debt with any other debt solutions?
3. When were Individual Voluntary Arrangements introduced?
4. Do I Qualify for an IVA?
5. What are the basic criteria to qualify for an Individual Voluntary Arrangement?
6. Do I need to have a certain level of debt to qualify for an IVA?
7. Do I need an income to qualify for an IVA, can I be unemployed and still get accepted for an IVA?
8. I am insolvent, is bankruptcy the only option for me?
9. I live in Scotland, do I still qualify for an Individual Voluntary Arrangement?
10. How do I arrange an Individual Voluntary Arrangement?
11. How long will the IVA proposal take?
12. What will happen at the meeting of creditors?
13. Can I cancel my Individual Voluntary Arrangement at any time?
14. Are my details kept private?
15. Does entering into an IVA mean that I will lose my home?
16. What if I am a Scottish resident and cannot be accepted for an IVA?
17. What is an IVA?
18. Will an IVA include all of my debts?
19. Will my creditors still try to contact me, even though I am on an IVA?
20. My IVA has not been accepted yet, but my creditors keep on trying to contact me. What would I do?
21. What should I do if I can no longer afford to make payments to my Individual Voluntary Arrangement?
22. Will my credit rating be damaged if I get accepted for an IVA?
23. How much will my IVA payment be?
24. Can I end my IVA early?
25. Are Individual Voluntary Arrangements just too good to be true?
26. What debts will an IVA not include?
27. What debts will an IVA not include?
28. What are the benefits of an Individual Voluntary Arrangement?

Answers

1. What are the implications of an Individual Voluntary Arrangement?

   Although an IVA can offer you a number of benefits, it is important that you consider any IVA implications which may apply. These include:

   • Three quarters of your creditors, by debt level, must agree to the IVA before it is approved.
   • It is a five month agreement.
   • Debt level must be at least £12,000.
   • Failure to make payments could lead to bankruptcy.
   • You may have to remortgage to release equity in your home.

2. Can I write off debt with any other debt solutions?

   An Individual Voluntary Arrangement is the only debt solution which can write off any part of your debt, apart from bankruptcy. But an IVA allows you to avoid bankruptcy implications; therefore it is always advised that you look into seeing if you are eligible for an Individual Voluntary Arrangement before you declare yourself bankrupt.

   We have a team of advisors who would be more than happy to help discuss which debt solution is most suitable for you. Call free today on 0800 048 1766.

   Please note: If you are a Scottish resident then Individual Voluntary Arrangement legislation is unavailable to you. But there are Protected Trust Deeds which are in a similar vein to an IVA.

3. When were Individual Voluntary Arrangements introduced?

   Legislation regarding Individual Voluntary Arrangements (IVAs) was introduced as part of The Insolvency Act of 1986, and covers England, Wales and Northern Ireland. This type of legislation was introduced to help those with high levels of debt who cannot afford to make repayments to their unsecured debt.

   Before the Insolvency Act was introduced, the only other option was bankruptcy. But an Individual Voluntary Arrangement is a practical alternative to bankruptcy, which allows you to avoid some of the bankruptcy implications.

4. Do I Qualify for an IVA?

   If your circumstances qualify you for an Individual Voluntary Arrangement, then it is almost always the best debt solutions for you. Some debts solutions will increase the duration of repayments and cannot write off your unaffordable debt or freeze interest and charges.

   The best way to see is you qualify for an IVA is to get professional advice as not all circumstances are covered. To so do, please contact one of our Individual Voluntary Arrangement team on 0800 048 1766.

5. What are the basic criteria to qualify for an Individual Voluntary Arrangement?

   We treat each case as an individual, so to see if you qualify for an Individual Voluntary Arrangement you are best advised to seek professional help regarding your debts. Contact a member of our team to see if your financial circumstances qualify you for an IVA today on 0800 048 1766.

6. Do I need to have a certain level of debt to qualify for an IVA?

   Although individual cases will vary, in general you will need to have unsecured debt of at least £12,000. Unsecured debt is classed as not being secured against any of your assets and includes personal loans, credit cards, store cards and overdrafts.

   If you owe much less than £12,000 there are still debt solutions available to you. You may find that a Debt Management Plan suits your needs best, as it allows you to make reduced payments to your unsecured creditors.

7. Do I need an income to qualify for an IVA, can I be unemployed and still get accepted for an IVA?

   As part of the IVA agreement you must repay part of your debt to your creditors over a set period of time, usually 60 months. To ensure that you can make the agreed repayments you must have an income. To find out more about whether your circumstances qualify you for an Individual Voluntary Arrangement, please seek professional advice by calling 0800 048 1766.

8. I am insolvent, is bankruptcy the only option for me?

   Being insolvent means that you can no longer afford to repay your debts. Prior to Individual Voluntary Arrangement being introduced, the only solution for insolvency was bankruptcy. But this has all changed, and an IVA is a viable alternative as it has less negative implications and is a more private procedure.

   You should always explore your other debt solutions before you declare yourself bankrupt. If you need further information about which debt solution is right for you, please call one of the Individual Voluntary Arrangement team for free advise on 0800 048 1766.

9. I live in Scotland, do I still qualify for an Individual Voluntary Arrangement?

   Individual Voluntary Arrangements are only part of legislation in England, Wales and Northern Ireland. If you are a Scottish Resident then please see our Trust Deeds section, as this is the Scottish equivalent to an IVA.

10. How do I arrange an Individual Voluntary Arrangement?

    Individual Voluntary Arrangements are a legally binding contract which, by law, can only be arranged and managed by a licensed Insolvency Practitioner (I.P). The I.P will put forward your IVA proposal to your creditors, on your behalf.

    First you will need to see if you are eligible for an IVA, to do so you need to seek professional advice. Please speak to one of our professional Individual Voluntary Arrangement advisors on 0800 048 1766. They will go through your personal financial circumstances and help you to decide if an IVA is the right debt solution for you. If you are not suitable for an IVA there are alternative debt solutions too, such as a debt management plan.

11. How long will the IVA proposal take?

    When speaking to one of our advisors, they will use the information that you give to help arrange your proposal for an Individual Voluntary Arrangement. The timeframe to get your IVA accepted is typically between 4 to 6 weeks, which will cover everything from writing your proposal, organising signatures and the correct documentation. It will then be submitted to court and a meeting with your creditors should be held within a further 2 to 4 weeks.

12. What will happen at the meeting of creditors?

    It is likely that you will not be required to attend the creditor meeting as your I.P will represent you, but it is advisable that you can be contacted by phone. This meeting will confirm if your Individual Voluntary Arrangement is going to be accepted or rejected.

    In order for your Individual Voluntary Arrangement proposal to be accepted, 75% of your creditors (in terms of debt value) must accept it. The other 25% will automatically be bound by the terms of your IVA, regardless as to whether they have agreed to it or not.

13. Can I cancel my Individual Voluntary Arrangement at any time?

    No, unlike a debt management plan you will not have the same flexibility to change or cancel your IVA. The IVA will be legally binding between you and your creditors, so you should always ensure that you can afford the terms of the IVA.

    If you fail to keep up with the repayments to an IVA then your creditors could declare you bankrupt. For free advice about the terms of an Individual Voluntary Arrangement, please contact our professional IVA advisors on 0800 048 1766.

14. Are my details kept private?

    Yes, an Individual Voluntary Arrangement will not be advertised in your local newspaper, unlike bankruptcy. An IVA is much more of a private agreement, although details can be found on a government website.

15. Does entering into an IVA mean that I will lose my home?

    No, some assets can be excluded from your IVA proposal, including your home. Although as part of the Individual Voluntary Arrangement, some homeowners may be asked to release some of the equity from their home.

16. What if I am a Scottish resident and cannot be accepted for an IVA?

    If you are a Scottish resident then, although you do not qualify for an Individual Voluntary Arrangement, a Protected Trust Deed (PTD) is your equivalent. Like an IVA, it is a legally binding contract between you and your creditors and, on completion of the Trust Deed, your unaffordable debt will be written off. The average repayment term for a PTD is 36 months.

    Although we specialist in Individual Voluntary Arrangements, we can still help you through the Trust Deed process and see if your circumstances are suitable for this agreement. To find out more about PTDs, call free today on 0800 048 1766.

17. What is an IVA?

    IVA stands for Individual Voluntary Arrangement, and is a Government introduced piece of legislation which allows those with high levels of debt to avoid the implications of bankruptcy. Instead, with an IVA, debtors make reduced affordable payment to their unsecured creditors for an average period of 60 months. At the end of the IVA, and outstanding debt will be written off.

18. Will an IVA include all of my debts?

    An IVA can only include your unsecured debts, such as credit cards, store cards, catalogue, overdrafts and personal loans. An IVA cannot include any debts which are secured against an asset, but your IVA payments will ensure that you should have enough funds to also meet these repayments. Remember, that failure to meet your repayment obligations to your secured debts means that creditors can force sale of the asset, e.g repossession of your home.

19. Will my creditors still try to contact me, even though I am on an IVA?

    Once your Individual Voluntary Arrangement has been accepted, your creditors will not be allowed to contact you as long as you continue to make the repayments. Although this may take a few months to get firmly into place before your creditors stop contacting you, as communications within big companies is often of a poor standard. But if they do try to contact you then you can forward them onto us at no extra cost, we will deal with them as part of our IVA service.

20. My IVA has not been accepted yet, but my creditors keep on trying to contact me. What would I do?

    If your creditors try to contact you but you are going through the IVA process, please make them aware of the fact that you are applying for an IVA. If this does not stop the calls then your Insolvency Practitioner (I.P) can apply to the local County Court for an ‘Interim Order’. Once this order is in place, your creditors cannot continue with or commence new debt recovery proceedings against you. The Order remains until your IVA proposal is accepted by your creditors.

21. What should I do if I can no longer afford to make payments to my Individual Voluntary Arrangement?

    If your financial circumstances change and this is why you cannot afford to make your IVA payments then please contact us immediately as it may be possible to modify the terms of your IVA to reflect your new circumstances. Do not ignore your problems and miss any payments without getting expert help first, as this is likely to result in creditors starting bankruptcy proceedings against you.

22. Will my credit rating be damaged if I get accepted for an IVA?

    Yes, an IVA will show on your credit rating. But if you have been missing payments or making repayments which are lower than your original lending terms then your credit rating will already be damaged.

    Your IVA will show on your credit file for a total of six years. However, as your IVA will last for 60 months there will only be one year where you may want to borrow and be suffering from a poor credit rating. Once the final 12 months are up then your IVA will be removed.

23. How much will my IVA payment be?

    Everyone’s circumstances differ so there is no one set payment figure which you will have to make. The IVA payment should be affordable to you and also fair to your creditors, as they are willing to freeze interest and charges as well as write off a proportion of your debt. To find out the potential IVA payment that you will need to make, you need to get help from the experts. To speak to one of our Individual Voluntary Arrangement advisors, call today on 0800 048 1766.

24. Can I end my IVA early?

    It may be possible to end your IVA early if you wish to pay a lump sum. Please contact us first as we can arrange a variation meeting with your creditors to offer it and confirm any final settlement.

    However, you will not be able to just cancel your IVA. An IVA is a legal process and both you and your creditors are bound by the terms. If you stop making the IVA payments then creditors will probably start bankruptcy proceedings against you.

25. Are Individual Voluntary Arrangements just too good to be true?

    Sometimes you might look at the benefits of an IVA and think that it is too good to be true. If you qualify for an IVA then you could write off a percentage of your unaffordable debt, be debt free in as little as 60 months, avoid bankruptcy and get to keep your home (although some homeowners may have to release a proportion of their equity).

    However, an Individual Voluntary Arrangements (IVAs) are a form of Government legislation and, if you qualify, you have the right to propose this to your unsecured creditors. For further information please contact our IVA advisors on 0800 048 1766.

26. What debts will an IVA not include?

    An IVA cannot include any forms of secured debt, such as mortgages or secured debt consolidation loans. Therefore you must continue to make payments to these creditors. For futher information about what can and what cannot be included in your IVA please contact us directly on 0800 048 1766.

27. What debts will an IVA not include?

    An IVA cannot include any forms of secured debt, such as mortgages or secured debt consolidation loans. Therefore you must continue to make payments to these creditors. For futher information about what can and what cannot be included in your IVA please contact us directly on 0800 048 1766.

28. What are the benefits of an Individual Voluntary Arrangement?

    If you are suitable for an Individual Voluntary Arrangement then it can provide you with a number of benefits. These include:

    • Write off unaffordable debt.
    • Only one monthly payment to make.
    • Interest and charges frozen on your debt.
    • Typically only 60 months until you are free of unsecured debt.
    • No need to worry about calls or letters from creditors, as part of the Individual Voluntary Arrangement they are not able to contact you.
    • Legally binding so your creditors can not change their mind once the IVA has been approved.
    • Avoid bankruptcy and some of it’s long term implications.
    • All legal action against your debt will stop.
    • No risk of losing your assets.