An IVA (Individual Voluntary Arrangement) is a solution for individuals that have unsecured debts and are struggling with repayments.
It is a legally binding solution that helps people to repay debts at a more affordable rate.
An IVA will typically last for a period of 5 years and during this time creditors included in the agreement will freeze interest and charges and write off any remaining debt at the end of the IVA.
Individuals in an IVA are also protected from unsecured creditors taking further legal action against them including petitioning for their Bankruptcy and they are no longer allowed to contact them about their debts.
So if you are struggling with your debt repayments, an IVA could be the right solution for you.
We will work out a new personal budget for you and based on what you have told us we will include this in your offer to creditors, known as an IVA proposal. Also included in your proposal will be details of how you found yourself to be in financial difficulty and also details of any assets you may have so that creditors can fully understand your financial position.
Your proposal will be sent to each of your creditors and if enough of them agreed to it, it will be approved. In order to achieve this we need creditors who own 75% of your unsecured debt to accept the IVA for it to go ahead.
Whilst we can’t guarantee that your creditors will agree to an IVA, we will do all that we can to demonstrate that it is the right option for all parties involved.
Once the IVA is approved your first monthly payment must be made within 30 days.
At the end of a successful IVA, any unsecured debt that you couldn’t afford to repay will be written off.
If you fail to keep to the terms of the IVA your creditors can resume collection actions for the full outstanding balance and no credit will be given in relation to any payments for fees within the IVA.
Failure could also result in your creditor taking bankruptcy action.
If you are a homeowner, you may be asked to release equity in the final year of the IVA, but an IVA should not force the sale of your home.
If you have assets which are not essential to you then you may be asked to make these available to your IVA (e.g. savings plans and ISAs).
Your credit rating will be affected for six years, starting from the date the arrangement is agreed.
You are not allowed to borrow or obtain credit during your IVA without the permission of your Supervisor.
To make you aware of all the different aspects of an IVA we have compiled a list of Frequently Asked Questions here.
The fees that we charge for preparing and supervising an IVA are included in the agreed monthly amount that you pay into your arrangement. You can see a more detailed explanation of our IVA fees here.
To view the 2014 standard conditions for Individual Voluntary Arrangements click here.
To view the 2016 standard conditions for Individual Voluntary Arrangements click here.
To view our terms of business for Individual Voluntary Arrangements click here.