Flexible IVAs
An Individual Voluntary Arrangement (IVA) is a formal alternative for individuals wishing to avoid bankruptcy. The IVA was established by and is governed by the Insolvency Act 1986 and constitutes a formal repayment proposal presented to a debtor's creditors via a licensed Insolvency Practitioner. An IVA usually last for 60 months depending on your individual circumstances. A successful IVA could write off a significant proportion of your debts with one affordable monthly payment.
Our initial advice and consultation process is free however charges will apply should you wish to implement an IVA. Since each case is assessed on its own merits it is not possible to set out the charges however, you will be made fully aware of any charges before you commit yourself to the process. Please note that an IVA may affect your credit rating for up to 6 years. If you are considering an IVA then you are clearly facing difficulties and are looking for a solution. Although IVA?s have disadvantages, in many cases the benefits far outweigh other alternatives available to you.
What is an IVA?
An Individual Voluntary Arrangement (IVA) is a legal process by which you can gain protection from your unsecured creditors by entering into a legally binding repayment agreement with them, which is then supervised by a licensed insolvency practitioner.
The arrangement is supervised by a licensed Insolvency Practitioner who is responsible for all negotiations with your creditors and for ensuring that you make all of the payments required under the terms of the arrangement. You are normally required to make regular monthly repayments, usually over a 5-year period, after which any balances remaining on your debts are written off.
If you are a homeowner, you will normally be required to release any equity you have in your property by taking out a mortgage or secured loan and paying this money to your creditors. Once 75% (by debt value) of your creditors have agreed and accepted an IVA, all interest and charges on your unsecured debts will be frozen.
Your supervisor in the IVA is required to review your financial situation every year and, if there is a change in your financial circumstances (such as a salary increase) then you may be required to increase your contribution.
IVAs do not have the stigma that is attached to Bankruptcy so the impact on the reputation is minimal. IVAs are not advertised in the press. However, they will be recorded on the IVA register held by the Insolvency Service and may affect your credit rating for up to 6 years. If you do not keep up your payments on an IVA may cause the IVA may fail or may result in Bankruptcy.
Whatever level of debt you may have, we shall assess your circumstances and recommend the most suitable solution to help you manage your debts. If your debts are below a certain level, the most common solution is often a Debt Management Plan (DMP). A Debt Management Plan is an informal process of negotiation with unsecured creditors to try to obtain a reduction in the repayment amount and/or a reduction in the interest charges, although this cannot be guaranteed as your creditors may not agree. The negotiation involves providing proof to the creditor that the individual is unable to meet their repayments. By reducing the payment this may lead to an increase in the outstanding total sum or the term the debt has left to run. A DMP may affect your credit record for 6 years.
If you wish to find out more about IVA's please enter your details into our enquiry form and one of our advisors will contact you.