Individual Voluntary Arrangement

Have you been struggling hard to settle your unsecured debts but don’t have the money-liquidity required to pay them off? Looking for a way to avoid bankruptcy? Then an IVA (Individual Voluntary Arrangement) may be a good option for you.

At UK Debt Advice, our IVA experts can provide you with complete information about the IVA agreement and work with you cohesively at every step of the IVA process, helping you overcome debt management problems without any stress or hassle.

An IVA is a Government backed debt help scheme that is legally binding agreement between the debtor (you) and the creditors where the debtor agrees to pay a certain percentage of the debt owed to the creditors normally over a span of 5 years. This agreement serves as a plan to settle the unsecured debt which the debtor owes within the decided timeframe. The payments are not only reduced but the outstanding debt after the final payment is then written off. And let us tell you that sometimes, it can be a significant portion—sometimes even as high as 75 – 85% of the overall debt amount.

You will only pay what you can afford each month after your essential living expenditure is taken into account. An IVA is available for both home owners and tenants that rent. For home owners there are certain guidelines to be factored in to see if you are able to do an IVA and protect your property at the same time. Our IVA advisors can talk to each customer and offer bespoke solutions for them regarding any IVA query they may have. No IVA is ever the same as each debtor (you) will have different debt amounts income and factors to be considered.

The creditors under this agreement cannot demand extra/additional debt payments from the debtor. Besides this, to ease the debtor from the burden of ever-increasing debt, all charges and interests are also frozen once the debtor and creditors agree to abide by an IVA. Once in the IVA the creditors by law can not contact you and chase you for any payments, the IVA company dealing with your IVA will deal with the creditors for the entire duration of the IVA then you will be advised it has finished and all debt will be written off following the term.

Please note that you, the debtor, can only avail this debt payment solution if the creditors who hold seventy-five (75) percent or more of the debts accept the proposal. If more than 75 percent of the creditors accept this proposal, then all your creditors, even those you didn’t agree to it, will have to accept and abide by the IVA, again this is not a set figure and every case is different so we always advise talking to an IVA advisor at National Debt Help to see what the best debt write off / solution is applicable for you.

The IVA (Individual Voluntary Arrangement) is set up by a professional and licensed Insolvency Practitioner. To set up an IVA, the debtor should disclose all unsecured financial debts. The IP (Insolvency Practitioner) also monitors and ensures that the debtor and the creditors confirm to the set terms and conditions and that the creditors continue to get the payment agreed in a timely manner.

Under the IVA agreement, the debtor makes the IVA reduced payment on a monthly basis over the pre-determined period of time. However, the IVA payment amount is calculated through a proper analysis of the debtor’s monthly income & expenditures. This payment amount is subject to change which is exactly why the financial situation of the debtor is reviewed quarterly by the IVA supervisor.

If your financial situation gets better, for instance your income increases, then the IVA payment amount will be modified accordingly.

The IVA agreement is slightly different for homeowners. Homeowners will be able to enter into an IVA providing any equity in the property is not greater than the overall debt amount.

Here are some of the many benefits of opting for an IVA:

• Outstanding debts are legally written off up to 75 %
• All late payment charges and interest payments are frozen
• You have to make only one (single) monthly agreed IVA payment to the Insolvency Practitioner which the IP will pass on to your creditors
• Become free from unsecured debts within five to six years
• Upon agreement, creditors can no longer ask for payments by making collection calls or sending out demand letters
• Improve and repair your credit rating

To qualify for an IVA, you must have:

• Over £5,000 unsecured debts
• Two or more creditors
• The ability to afford at least a repayment amount of £70/month

First, our IVA expert will analyse your financial situation to assess whether or not the IVA is a good choice for you. If the answer is a yes, our expert will calculate the precise IVA repayment amount based on your income and expenses. Therefore, the information you provide us should be accurate. To implement the IVA plan, your creditors will be asked to vote for approval in what is called a creditors meeting. If more than 75 percent of the creditors agree and approve the proposal, then you and your creditors will sign the agreement. It is important to follow the rules and requirements of an IVA because it is legally binding, and therefore violating the rules can put you in deep waters but always talk to your IVA company if you fall into any payment difficulties when on your IVA.

We at UK Debt Advice are here to help you with any of your financial worries.