IVA Basics

What is an IVA?

An Individual Voluntary Arrangement or IVA is a legally binding contract between you and your creditors where you will enter a pact with all the creditors you owe money to, to make marginally reduced payments towards the settlement of the total amount of your debt in order to pay off a percentage of what you owe then generally after 5 years your debt is deemed as settled. Due to its formal character, an Individual Voluntary Arrangement/ IVA has to be set up and supervised by a licensed professional called an Insolvency Practitioner (IP)

IVA Types

There are different types of IVA -

• IVA Mortgages - The phrase IVA mortgage generally refers to the procedure of taking out a re-mortgage in order to meet the ending payment as arranged in the IVA agreement. It can also be termed as IVA Re-mortgage.
• Lump Sum IVA - This IVA is also known as 'Full and Final Settlement'. It is sometimes likely to settle the amount, a debtor owes to creditors determined by an IVA, by making a lump sum payment. In certain situations, the creditors may even accept a lump sum as a concluding payment, even if it is lesser than the original debt incurred.
• Business IVA - this IVA is for businessmen and entrepreneurs. It will be for them alone to calculate the assets of their business and make a judgment on their individual monetary status. Your business could be clogged down and its possessions liquidated to pay some or all of your debt.
• Single IVA - A Single IVA is an application where all of the debts only exist against one name. It doesn't matter whether you are married, divorced, or single. Debts that are owed jointly with another person can also be integrated in a Single IVA.
• Assisted IVA - it is much like a Single IVA only because it is an IVA application where the amount outstanding is all under one name. While a debtor is not indebted to pay any of their spouse's arrears, it may give the IVA a better chance of being accepted by creditors if they add money to their husband/wife/partner's IVA.
• Joint IVA - In this IVA, two applicants choose to file an IVA application together.

IVA Help

Our website has been designed with the primary objective of helping people understand all about Individual Voluntary Arrangements and how they work. Our endeavour is to take the misunderstandings out of the IVA process by offering one-on-one telephone consultations to those trying to decide whether entering into an IVA is in their best interests.

During your consultation sessions, we explain all the pros and cons of IVA, when applied particularly to your individual circumstances, and we explore the pros and cons of all the alternative debt solutions available to you.

Starting an IVA

Debts are settled within a realistic and fixed tenure (normally 5 years). Any interest and debt charges will be frozen and creditors will be proscribed from asking for additional payments.

As soon as a decision has been made that a particular Individual Voluntary Arrangement or IVA is right for you, you will be asked questions concerning your current financial situation. Based on the information you provide, a fixed repayment amount will be decided which should be paid regularly. Once proposals have been drawn up you will be required to check and sign these and later return them to your Insolvency Practitioner (IP).

The IVA process

An Individual Voluntary Arrangement (IVA) calls for the participation of a licensed insolvency practitioner, who helps you to put together your proposal and arrange the meeting of creditors to consider the same.

While the exact terms of the proposal may differ, in a typical IVA you will be required to make a reasonable monthly payment to the IP out of any surplus income, besides your living expenses, over a period extending up to five years. Moreover, if you own a property with equity in it, you may also be required to make a lump sum payment(s) at the end of the IVA.

After deducting the service fee, the IP will make intermittent payments to the various creditors, the size of which will be dependent on the contributions made by the debtor and the comparative size of that creditor's debt.

Assuming you carry out what you promised to do in the drafted proposal you will, in a typical IVA, be free of all your debts in just about 60 months.

Am I eligible for an IVA?

There are a number of requisites you must fulfill if you are to propose an Individual Voluntary Arrangement (IVA):

1. You must be technically insolvent which implies that you cannot pay all of your debts as they currently fall due.
2. In case you wish to propose an IVA with an interim order, in no case, should you have proposed the same within the past 12 months.
3. You must have someone prepared to act as your nominee who must be a licensed insolvency practitioner regulated by one of the recognised Professional Regulatory Bodies.

What does an IVA cost?

The standard cost of an IVA fee is around £1,500 plus VAT charges. Other than this, there is also an annual fee which is also known as a Supervisor's fee and costs around £50 per month on an average.

The cost of an IVA is generally included into the IVA monthly payments made. The monthly amount paid into the IVA covers the payments to your creditors as well as the cost and fees for carrying out the IVA programme. It is important to bear in mind that if the IVA fails at creditors meeting or you undergo a change of mind we you will not have to pay any cost or fees for this work whatsoever.

IVA monthly Payment

Monthly payments set for an Individual Voluntary Agreement are usually done through a validated bank account set up exclusively for that IVA. The payments may either be a direct debit or else in standing order.

• The bank account used for transacting the monthly payments are set up and controlled by the Insolvency Practitioner or IP who overlooks the IVA.
• This allows the IP to split the payments from other IVAs, as well as facilitates him to move the money in and out of the account easily.
• The IP inspects the account monthly to ensure that payments have been made into the account as it is necessary that payments are made without fail and on time once creditors have agreed to the IVA.

Expert Advice

Our experts advise you on all aspects of debt management and IVA after careful comprehension of your current financial situation. Furthermore, a step-by-step action plan is charted out to cater to your specific needs and our experts also make sure that you follow up your commitment by making you disburse regular payments to bring down your debts.