IVA | Individual Voluntary Arrangement

An Individual Voluntary Arrangement ( IVA ) is an agreement with your creditors to pay all or part of your debts. You agree to make regular payments to an insolvency practitioner, who will divide this money between your creditors.


Struggling with debt repayments?

95% of our customers’ have had their interest and charges frozen. We’ll help reduce your repayments to an affordable level.

Finding it difficult to make ends meet?

If you’re struggling with money on a day-to-day basis, we can help you start to become debt-free so you can get your life back on track.

Are you receiving letters and demands?

With our help, we will make sure lenders do not harass or contact you. So you don’t have the unwanted pressure of dealing with this.

We’ll take care of everything!

From when you get in touch, we will take care of everything, from speaking to your lenders, to dealing with any paperwork.

Struggling with debt repayments?

95% of our customers’ have had their interest and charges frozen. We’ll help reduce your repayments to an affordable level.

Finding it difficult to make ends meet?

If you’re struggling with money on a day-to-day basis, we can help you start to become debt-free so you can get your life back on track.

Are you receiving letters and demands?

With our help, we will make sure lenders do not harass or contact you. So you don’t have the unwanted pressure of dealing with this.

We’ll take care of everything!

From when you get in touch, we will take care of everything, from speaking to your lenders, to dealing with any paperwork.

What is an IVA?

If you have debt of over £10,000, then an Individual Voluntary Arrangement (IVA) could be appropriate for you.

An IVA is a legally binding agreement between you and the people and organisations you owe money to (creditors), other than your mortgage. An IVA is often a solution people consider when they feel there is no real prospect of paying off all of their debt. It’s worth noting that there can be negative consequences to IVAs and your credit score.

IVA debt advice

Pros of an IVA

  • Make affordable monthly payments, usually over five or six years.
  • If you’re a homeowner you’ll usually be able to keep your home, as long as you maintain the mortgage payments and any secured loans on your property.
  • If you have a lump sum to offer, you can this off with one ‘full and final’ settlement, or a combination of a lump sum payment followed by monthly payments.
  • Once you’ve made your final payment any remaining unsecured debt is written off and your creditors can’t pursue you for payments.

Cons of an IVA

  • Equity in your home? You’ll need to try to re-mortgage which may result in a higher interest rate
  • If you’re unable to re-mortgage you can make a maximum of 12 extra payments or a third party can offer a sum equivalent to the equity
  • If your IVA fails, creditors may request the supervisor of your IVA petitions for your bankruptcy
  • Your credit rating will be negatively affected
  • There’s a possibility your creditors may not approve your IVA
  • At the end of your IVA, only unsecured debts included will be written off, any not included will remain outstanding
  • Your IVA will be recorded on a public register
  • Once your IVA is set up your spending will be restricted until the IVA comes to an end

What’s the difference between an IVA and Bankruptcy?

An IVA is often better than a bankruptcy. While bankruptcy and an IVA are formal, legally-binding agreements between you and your creditors. Both have to be approved by the court and your creditors have to stick to them. There are advantages and risks to both bankruptcy and IVAs. Before choosing the best solution for you, you should find out more about each one.

Flexibility

Many people prefer an IVA as there are fewer restrictions and upfront costs associated with it. An IVA is more flexible than bankruptcy and can be set up to fit with your personal circumstances. If you have assets such as a car or other personal possessions, it may be possible to keep these instead of using them to pay your creditors. Your insolvency practitioner will help you negotiate with your creditors to keep these outside the IVA.

IVA

  • Your home, car and other assets are protected.
  • Affordable payments for 60 months.
  • Substantial amount of debt written off.
  • No up-front costs – No impact on employment.

Bankruptcy

  • Potentially lose your home, car & other assets.
  • You may still have to make payments for 36 months.
  • Insolvency Service fees of £680 to apply.
  • May impact your employment.

Why consider an IVA over Bankruptcy?

No Upfront Fees

Unlike bankruptcy, you will not have to pay a large upfront fee. It currently costs £680 pound to apply for bankruptcy.

Your Home Is Protected

In an IVA your home is protected as you can budget for mortgage payments before considering other debts.

Less Impact

An IVA is removed from credit report after 6 years – but you can be asked in mortgage application if you’ve ever been made bankrupt.

No Personal Restrictions

Bankruptcy impacts your business affairs & can restricts employment. You may have to declare to your employer that you’ve been bankrupt.

Protection From Creditors

Both an IVA and bankruptcy stop creditors by law to pursue payment for any debts. This stops harassment by phone and post.

Affordable Payments

Your IVA payments are based on what you can afford – not the size of your debts. This allows small repayments over a certain time period.

Applying For An IVA

When you contact us we will chat about your current situation, including an assessment of your income, outgoings and your debts. This will tell us if an IVA is a good option for you.

Should an IVA be suitable – the next step is to draw up a formal proposal for consideration by your creditors.

Once the IVA receives approval, your creditors are then bound by its terms, and all debts are then frozen.


Your responsibilities

Your insolvency practitioner can cancel the Individual Voluntary Arrangement if you do not keep up your repayments. The insolvency practitioner can make you bankrupt. You may still be able to keep your business running if you have one without your agreement affecting it.

Individual Voluntary Arrangement are a type of insolvency and will show on your credit file for six years from the date they begin. During this time you’re likely to find it difficult to obtain credit. You must also inform your insolvency practitioner (IP) and get written permission if you want to take out more than £500 worth of credit during your IVA.

Individual Voluntary Arrangement & Public records

Your Individual Voluntary Arrangement ( will be added to the Individual Insolvency Register. It’s removed 3 months after the IVA ends.

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