IVA (Individual Voluntary Arrangement) and Debt Management plans
Would you benefit from an IVA (Individual Voluntary Arrangement)
What is an IVA?
An IVA is an Approved Debt Repayment Scheme which allows people who are struggling with debt become debt free in a short period of time usually 5 years and any unsecured debt which you cannot afford to repay back will be written off as part of the arrangement. The government introduced the IVA as part of the Insolvency Act 1986 to give people a second chance. It is a legally binding structured repayment plan which benefits both you and your creditors.
For individuals with over £15,000 of debt an IVA could free you from your unsecured debt usually within 60 months.
An Individual Voluntary Arrangement is a legally binding agreement which stops creditors hounding you, ceases all interest charges and can free you from debt in as little as 60 months.
It is designed for people who are struggling with debts and have three or more creditors. To qualify you must have proof of employment, be a UK citizen and owe more than £15,000.
- Less stigma than bankruptcy.
- No publicity.
- Not bound by bankruptcy restrictions.
- Can continue to trade if in business.
- Can exclude assets such as the home if creditors agree.
- Creditors will be bound by the IVA even if they voted against it.
- Usually lasts a maximum of five years.
- Most insolvency practitioners will allow fees to be paid on a monthly basis as part of the IVA.
- Some insolvency practitioners follow the IVA Protocol which provides guidelines for how an IVA should be drawn up and how the insolvency practitioner should behave.
- This will affect your credit rating.
- You need to have high available income or a lump sum or asset available to make an IVA possible.
- Costs are high (typically £4,000 plus) and the insolvency practitioner may require payment of fees up front.
- You can still be made bankrupt if the IVA fails.
- Some IVAs fail because the payments agreed are too high in the first place.
- If your circumstances change the IVA may end if the insolvency practitioner cannot get creditors to accept new terms.
- Many IVAs have a built in requirement to revalue your home and release equity to pay the creditors after a set number of years of payments (usually five).
- There is a growth in companies who may offer to set up an IVA for you even if it isn't suitable in your circumstances and charge high fees.
How do I start IVA
What do I need to prepare?
It is very helpful if you can have the following information to hand before you start the Debt Counselling process:
- Income, including any benefits or pensions.
- Household bills, including mortgage, rent, utilities and any missed payments.
- Other regular payments you make.
- Unsecured debts, such as credit cards, loans, overdrafts.
- Secured debts, including mortgages or secured loans.
- The value of any assets, for example your house, car or caravan.
- Any court orders or court paperwork you have.
We will show you a range of Debt Solutions and recommend the most appropriate one for you.
Viva Debt Solutions are committed to providing an ethical and transparent service. Follow the link to learn more about our fees.
IVA advice in Nottingham
Viva Debt Solutions are located in Nottingham and offer professional counselling on IVAs. So why not call us on Local 0115 8967 539 or National 0844 8262 591 - or email us at email@example.com