What is an Individual Voluntary Arrangement?
An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors – formal meaning that you will enter into a contract with your creditors for a period of sixty months (five years) where you agree to pay a set amount until the debt is repaid. The amount of debt that will be written off ( up to 75% of the debt ) will be determined in the initial stages and will be based on what you can afford to pay on a monthly basis and the overall amount of debt. Please see the example below.
How does an Individual Voluntary Arrangement work?
During an informal chat with a debt advisor, you will run over your income and expenditure which will take around twenty minutes.
We will then be able to determine how much you can realistically afford to offer each of your creditors on a monthly basis over the 60 months.
Proof of income, mortgage or rent and other monthly expenditure may be requested.
The Insolvency Practitioner will draw up a proposal which will be sent to your creditors which will show what you can afford and a detailed report of what your monthly expenditure is.
In some cases the creditors may request modifications to the Individual Voluntary Arrangement proposal. You will be contacted if there is such a request.
A creditors meeting will then be held to discuss the Individual Voluntary Arrangement application and as long as 75% agree to the proposal, the court and all of the creditors are informed, at which point it will become legally binding.
You make your monthly payment to the Individual Voluntary Arrangement for the agreed amount of time and at the end of the set period (usually five years) the remainder of the debt is written off and you are debt free.
An Individual Voluntary Arrangement will last for a fixed period of five years, at the end of the term you will be debt free.
- Your creditors are legally bound by the terms of the agreement.
- Can be used to prevent bankruptcy proceedings against you.
- No public notices: an IVA is between you and your creditors.
- Prevent legal action, including bankruptcy.
Some of the debts that we can deal with:
- Personal Loans
- Credit Cards
- Overdrafts
- Catalogues
- Payday Loans
- Utility Arrears
- Mortgage Shortfall
- Mobile Phone Debts
- Council Tax Arrears
- Door Step Loans (e.g. Provident, Shopacheck)
- Store Cards
- and many, many more
Monthly essentials we can free up funds for:
- Mortgage and mortgage arrears
- Rent and rent arrears
- Utility bills and arrears
- Council tax and council tax arrears
- Hire Purchase Agreements
- Secured Loans
- and many, many more
If you have over £15000 of debt with three or more creditors and would like to see if you qualify to clear the debt over a period of 60 months for an affordable monthly amount, please have a look at Individual Voluntary Arrangement.
