An Individual Voluntary Arrangement (IVA) is a formal debt solution meaning you can consolidate all of your debts and pay one low affordable monthly payment to an Insolvency Practitioner (IP). Your Insolvency Practitioner will distribute this contribution according to the amounts agreed by the creditors that you owe money to. Your IVA debt will be reduced as you make payments into your plan. You make your payment every month for 60 months (5 years) and at the end of the term all of your debt balances are written off completely.
Whilst you are in your IVA, your creditors will not be allowed to contact you or take any further action against you. If you are looking for financial advice which will stop bankruptcy and help you on the road to financial recovery, then look no further than an IVA.
If you have a debt of more than £5,000 and owe money to two or more creditors, an IVA is often an appropriate solution for those struggling with unsustainable amounts. You will need to prove that you have a steady income, which will allow for regular monthly payments of a minimum of £70.
A number of individuals choose an IVA as it will create a structured repayment plan with frozen interest on most types of debts including; credit cards, loans, overdrafts, payday loans and overdue tax repayments. There are a number of debts which are excluded from an IVA, such as; social fund loans, student loans, court fines, child support arrears, hire purchase agreements and secured loans and mortgages.
An IVA is particularly beneficial to professionals such as accountants or solicitors, who would not be able to continue working when under bankruptcy.
An IVA can act as a final way to complete repayments to creditors as part of a debt management plan. Entering into an IVA is often beneficial to your creditors, particularly if you have received a statutory demand or bankruptcy petition, so in many cases the proposal made is agreed.
If you are renting your home an IVA will have little effect, but if you file for bankruptcy you may be asked to move if you are in rent arrears. If you own a home, some IVA’s will require you to re-mortgage your property six months before the end of the arrangement. If this is not an affordable option, the length of the IVA could be increased by additional 12 months if money cannot be found from another source. If you file for bankruptcy the receiver will make a decision about your home based on the equity you have, they have two years and three months to decide.
A moderately priced vehicle can usually be kept during an IVA arrangement, while bankruptcy will often mean a vehicle has to be sold, unless it is possible to show that a vehicle is needed to commute to work or is very low value. Within an IVA you will usually be able to continue using your bank account, providing there are no unsecured debts to the provider. In bankruptcy it is likely that all bank accounts will be frozen.
Although IVA’s are more flexible to changes in circumstances than bankruptcy, there is a longer payment period. Within bankruptcy payments will be required for a maximum of 3 years, but IVA’s usually last for 5 or 6 years, meaning it will take longer to clear the debt. Although in both processes all remaining unsecured debt is written off upon completion.
Here is an example of how an Individual Voluntary Arrangement could make your debts affordable.
Think it’s impossible to:
An Individual Voluntary Arrangement could give you your life back and pave the way to a happier debt-free future for you and your family. Your IVA will allow you to get your life back on track through sensible financial management. You will be able to not worry about your creditors heavy handed approach towards debtors.
“The real low point before my IVA was having my card declined at the supermarket.
I had the kids with me and a full trolley of shopping all packed up in bags. I ran out of there dragging the kids behind me and I’ve never gone back.”
Mrs Karen Collete, awarded an Individual Voluntary Arrangement in 2011.
Absolutely, and getting the ball rolling is easy. All you have to do is fill out the form above to apply for an IVA. Our experienced and friendly IVA Advisers will go through all of your options and tell you straight away whether an Individual Voluntary Arrangement might be the right step.
An IVA will last for just 5 years meaning you will be back on your feet with your finances faster.