IVA (Individual Voluntary Arrangement)
WHAT IS AN IVA
Debt and financial pressure is now a way of life for most people. It is also a fact of life that people's financial situations may change drastically resulting in money worries, sleepless nights, and pressure from creditors and worse. Talk to our expert consultant on IVAs this will hopefully provide some information on how an IVA could assist in easing the pressures of financial burdens
IVA’s
An IVA is a document appointing a Licensed Insolvency Practitioner to deal with your financial affairs. By signing the document, you undertake to agree to a repayment proposal, under the guidance of a Trustee. The proposal can usually range for payment of anywhere between 10p and 100p in the £ to your creditors over a set period (England is usually 5 years, Scotland 3years). In return, you will receive protection from your creditors, which may otherwise involve having your wages arrested, as well as general pressure for payment from your creditors, through correspondence with legal threats and often-late night phone calls at home. The advantages of an IVA are:
- It releases you from the pressure of creditors.
- An IVA can affect your credit rating, Equifax will record IVA’s, Experian does not.
- There is no court appearance.
- You can hold a bank account and can continue to be self-employed.
- You retain household items and your car if it is required for work.
- It is a more flexible alternative to Bankruptcy.
Home Ownership
Your Trustee will be required to calculate if there is any equity / profit in your home (Equity / Profit = The value minus any mortgage / secured loans). Remember, your Trustee only has an interest in your share of the equity if the property is jointly owned with your spouse or partner, whose share is protected from your creditors, unless the debts are in joint names.
Your Trustee may require any equity towards your debts this may mean that you will be required to re-mortgage and release this equity to your creditors. If this situation is applicable to you, this will be discussed in depth with your Trustee.
Do I have to pay my debts in full?
Not necessarily. Remember an IVA is an agreement with your creditors for repayment off a specific amount of your debt. Your Trustee will work out the value of any assets or an agreed monthly contribution and make a proposal to your creditors.
Will my creditors agree to a IVA’s?
A creditor meeting will consider your proposal. You will not usually need to attend as typically most creditors do not attend, voting by proxy instead. Even if creditors do attend, the meeting usually only lasts for between 15 - 20 minutes. But you need to be available at the end of a phone line during this period.
In practice, it is unusual for an IVA to fail. Once the creditors have agreed on the terms of the IVA thereafter all creditors are bound by it. If less than 50% or less than one third object to it, they are still bound by the IVA and cannot carry out any action against you for recovery of any debts.
What if my debts are joint with my Partner?
An IVA deals only with your financial affairs. If you have joint loans with your partner, then your creditors have the option of pursuing your partner for the full amount. However should your partner also enter into an IVA, they would receive the same protection.
What do I do next?
Allow us to complete a short questionnaire over the telephone from which we will then assess your case and confirm to you as whether an IVA is a suitable solution to your debt problems.
Should you have any questions please contact us direct on 0800 032 9859 or 01506 882928 and one of our team will be more than happy to assist you.