Individual Voluntary Arrangement (IVA)
Help with your IVA
If you are considering an IVA we’re here to give you straightforward help and advice on the options available to you. At No Debt Now we’ve been helping people in debt for over ten years and have a wealth of experience in providing lasting solutions to help people with debt problems. The first question most people have is what is and IVA? Well, an IVA, or Individual Voluntary Arrangement is essentially a formal agreement between you and your creditors, the people to whom you owe money, to pay all or part of the debts you have with them. These arrangements have to be set up professionally by an authorised Insolvency Practitioner (IP) and as such there are professional fees that will have to be paid to enter into an IVA. An IVA will generally last for a five year period during which you will be expected to pay everything you can afford outside of agreed ‘reasonable’ living costs. So how do you know if an IVA is the right course of action for you? Well, an IVA is a simple way of formally agreeing to settle all your unsecured debts over a fixed time period. Once you have engaged the services of an Insolvency Practitioner they will be able to help you work out how much you can afford to repay each month after your living expenses have been deducted.
As part of the service they will contact all your creditors and ask them to agree to the terms of your IVA and they can stop creditors taking any further action against you, like taking you to court or trying to make you bankrupt, once your IVA is accepted. The Insolvency Practitioner will also arrange with your creditors to stop any interest charges or additional payments as part of the IVA. What about free help? Does it exist? Of course it does. We recommend that you read the Insolvency Service’s Debtor Guide which is a free guide produced by the Insolvency Service, giving you a clear, no nonsense summary of all the different forms of debt management, including IVAs. At the No Debt Now we also offer free advice in helping you decide if an IVA is right for you but please be aware that should you decide to enter into an IVA or any other form of Debt Management Plan then fees will be payable. All IVAs will vary in cost depending upon each individual’s circumstances. Details of the charges than can be made are given in the IVA Terms and Conditions
What are the benefits of an IVA?
- You only have to make a single affordable payment each month
- A proportion of your debt is likely to be wiped out
- All interest and credit charges on your existing debts will stop
- All your creditors, even those who don’t agree with it, are bound by the terms of the agreement
- Creditors can’t take any further action against you, so no more hassling calls or letters
- Your outgoings are fixed for a sensible duration (usually five years)
- When the IVA is finished the balance of what you owe your creditors is written off forever.
What are the risks of an IVA?
- Your IVA is entered into a public register which means that credit reference agencies will be able to see it. This will seriously impair your ability to open a new bank account or get a loan as your credit rating will be impaired.
- Some firms will require you to pay upfront fees to your Insolvency Practitioner to arrange the IVA, although at Knightsbridge Insolvency, which is part of the No Debt Now, we don’t charge any upfront fees.
- If you have equity in your home you will generally be required to release all or part of this in the fourth year of the arrangement as part of the settlement to your creditors.
- If your IVA fails, or you fail to maintain the payments into an IVA, your creditors can take further action against you and you may be made bankrupt.
- There are also restrictions on what expenditure is usually permitted when you are on an IVA. For example creditors will not usually accept extravagant expenditure or anything that could be seen as an unnecessary luxury such as gym membership. There may be individual reasons for such expenditure such as health problems however these are considered on a case by case basis.
Entering into an IVA therefore is a decision which requires a lot of thought and professional help. So why not call us right now? Our specialist advisors will be able to talk to you about your debt situation and advise you on the right course of action, whether it’s an IVA, Bankruptcy, a Debt Management plan or simply a case of rearranging your finances into a more affordable solution. Our friendly helpful advisors are ready for your call right now, so call us on our freephone number or fill in the form here and let us call you straight back.
Consumers in England and Wales may also wish to consult the Insolvency Service’s debtor guide – In debt? Dealing with your creditors…
Free debt counselling and advice is also available from the Money Advice Service
available at: https://www.moneyadviceservice.org.uk