Check If You Qualify For An IVA
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May not be suitable for all circumstances.
Fees may apply.
Monthly payments calculated on affordability.
Entering into an IVA will affect your credit rating.
An IVA stands for an Individual Voluntary Arrangement, this is a legally binding agreement between you and your creditors, where you agree to repay what you can afford within a fixed period, usually 5 to 6 years.
An IVA allows you to make one monthly payment, so keeping on top of things is much simpler. Your personal circumstances will be considered (income/outgoings), and so will your total debt level. Creditors’ approval is required before an IVA can commence. Any remaining balance at the end of the arrangement will be written off by your creditors.
A licensed Insolvency Practitioner must act on your behalf and negotiate with your creditors so you don’t have to. During the IVA, your creditors must freeze all interest and charges. If your IVA is approved by your creditors this will require a long and professional relationship which requires you to be transparent and honest, you are required to keep the Insolvency Practitioner updated with any changes.
What are the risks and benefits of an IVA?
An IVA allows you to repay your creditors what you can afford within a specified time frame. Creditors are legally obliged to write off any outstanding balances upon completion of your IVA. Creditor approval is required in order for your IVA to commence.
To determine if you qualify for an IVA your income and expenditure is reviewed to see how much you can afford to repay. Your personal circumstances will be considered (income/outgoings), and so will your total debt level. If you meet the criteria then your IVA proposal to creditors will include the total amount to be repaid, the amount to be written off, and the end date for your IVA. A typical IVA lasts around 5 or 6 years, after which the debts included in the IVA will be written off.
An IVA typically lasts between 5-6 years dependent upon your circumstances.
Our initial advice in relation to an IVA is free. If you choose to proceed and propose an IVA to your creditors as your chosen debt solution then there are fees involved which are included in your monthly payments.
An IVA will affect your credit rating for 6 years from the date of approval as you are not making your contractual payments. The IVA will show on your credit file and will be shown on the Insolvency Register.
If your IVA is approved your Insolvency Practitioner will communicate with your creditors. Your creditors are still required to send you statements in line with the Consumer Credit Act 1974, however once your IVA has been approved your creditors should no longer contact you in relation to payments as these are made from your IVA. It can take up to 3 months for creditors to update their records. Your Insolvency Practitioner will continue to communicate with creditors until this contact ceases.
Not every type of debt can be included in an IVA, debts that can be included in an IVA are:
You cannot include your ‘secured’ debts in an IVA, and you should maintain payments towards these. Examples of debts that an IVA cannot cover are: