An IVA (individual voluntary arrangement) combines your debt into one affordable monthly payment for a fixed period of time, usually 5 years, after which any remaining debts are written off. If you have equity in your property (i.e. it's worth more than the debt secured on it) you may have to remortgage in the 5th year of your IVA to release equity to contribute towards your outstanding debt. If you are not able to do this, your IVA could be extended for one more year to allow further monthly repayments.
It is a legal agreement between you and your creditors, this means you will be legally bound to the agreement. Your creditors are required by law to freeze interest charges and fees.
You will then be contacted by a member of our specialist IVA team who will complete an in depth, confidential assessment of your financial situation. They will gather information about your creditors, your finances and work out how much you can afford to pay to your unsecured creditors each month whilst ensuring you have enough to cover all you other household costs.
Our IVA Specialist will then review your eligibility for an IVA and will discuss with you all the options available and the consequences of entering it an IVA, allowing you to make an informed decision about how you wish to proceed.
If you are eligible for and wish to proceed with an IVA; the next step is to produce your proposal document. The Proposal document is produced by an Insolvency Practitioner on your behalf, who will then supervise the IVA for its full term. Your Proposal contains a breakdown of your financial situation and details what you are offering to pay to your creditors on a monthly basis, usually for a term of between 5 – 6 years. It also contains the terms and conditions of the arrangement and your own responsibilities to ensure the successful completion of the IVA.
Once the Proposal has been drafted, it is then sent to you to approve. As soon as you have signed and returned it, the Proposal is then submitted to your creditors, who are given the opportunity to vote as to whether they wish to approve the IVA. Your IVA is approved if enough of your creditors vote to accept (for an acceptance we required at least 75% by value of your unsecured debt to vote to accept).
Once the IVA has been approved, we will work with you to ensure that your IVA runs smoothly. Whilst in the IVA, your circumstances will be reviewed on an annual basis to ensure that the repayment plan is still affordable using nationally recognised spending guidelines.
If, however you find that you struggle with your payments or have had a change in circumstances, or even an unexpected bill, if you make us aware and keep in contact, we can help to make sure that your IVA still has the best possible chance to succeed.
Upon the successful completion of the IVA, any remaining debt and the accrued interest and charges are written off.
As with any formal debt solution (Bankruptcy or Debt Relief Order), your credit rating will be affected for six years from the start date and your name will be added to a Public Register (the Individual Insolvency Register). If you come into any money during the term of the IVA e.g. an inheritance, lottery win, pay rise or bonus, you may have to pay a proportion of the funds received towards your debt.
If you own your own property, you may be required to free up any equity in your property by way of a remortgage to pay towards your debts; - remortgaging whilst on an IVA is likely to be on less favorable terms than your current mortgage. However, if you can’t remortgage, the IVA could be extended by up to 12 months.
It is important that you keep up with your repayment pan. If your IVA fails, you could be at risk of Bankruptcy.
Our initial advice is free; however, fees will apply if you decide to enter into an IVA. These are not upfront costs; they are paid out of (not on top of) the agreed monthly payment and will be discussed in detail by your IVA specialist before you make the decision to proceed with the IVA. We will always be completely honest and transparent about the fees charged and what these fees are for.