An IVA (Individual Voluntary Arrangement) is where you come to an arrangement with all of your creditors about how to pay off your debts, which is enforceable by the Insolvency Act of 1986.
The IVA is usually prepared under the supervision of a licensed Insolvency Practitioner and, once in place, it has the force of law. The good thing about an IVA is that it stops your creditors from harassing you and it enables you to have a great deal more control over your assets and how they are dealt with than you would by declaring yourself bankrupt.
If you find that you are heavily in debt and cannot meet your repayments to creditors then an IVA may be the best plan of action for you.
We can appoint our Licensed Insolvency Practitioner who will act on your behalf with all correspondence from your creditors. The insolvency practitioner, with your help, will then produce a written proposal. This will then be sent to your creditors in accordance to a pre-determined creditors meeting, usually held at the Insolvency Practitioners offices in the absence of both yourself and the creditor.
The IVA proposal will include details of your income and expenditure, a list of your creditors names and addresses, amounts due to your creditors and a detailed history of your credit problems, including your past and present circumstances. Your IVA proposal will include a statement of affairs; this will provide you with what you are looking to offer your creditors and over what time period. As soon as your proposal has been finalised your Insolvency Practitioner, may apply to your local County Court for an Interim Order. This will provide you with valuable protection against CCJ’s, Attachment Orders and even Bankruptcy Orders.
All of your un-secured creditors will be bound by the IVA, provided that more than 75% (by volume) of the unsecured creditors agree to the proposal. As soon as your proposal has been approved all interest will stop on the debt that you owe.
After the creditors meeting, your Insolvency Practitioner will take on the role of supervisor of the IVA. Your Insolvency Practitioner will review your income and expenditure on a regular basis, so that any change in your circumstances can be reported to your creditors. Similarly if you report to your Insolvency Practitioner a change in circumstances, for example a job loss or a reduction of income then your supervisor will be sympathetic and will be able to advise you on any action to be taken.
Your creditors are bound by the IVA and must not hassle you in any way outside of your IVA. Your creditors cannot petition for your bankruptcy in relation to your debts included in your agreement. However, if you default on making payments in accordance with the agreement, your Insolvency Practitioner is obliged to petition for your bankruptcy. So, if your debts are serious enough to go the IVA route, you need to follow it through properly.
IVA’s have a significant effect on a credit record. Even when you have completed on your IVA you may also need to declare this fact on mortgage/credit applications for many years after an IVA was completed even if it is no longer visible on a credit record. Like all debt solutions there are significant advantages and disadvantages that go along with using an IVA to resolve debt concern and it is important for you to be aware of same.
Your creditors will agree to pay your Insolvency Practitioner a fee for managing the IVA. If you complete your IVA as agreed then you will pay no more than your scheduled monthly installments. However, if your IVA fails before completion then any outstanding fees to your Insolvency Practitioner will be taken from the amounts you have already paid and will not go towards reducing your debt. It’s also important to bear in mind that if you receive any windfall during your IVA (such as an inheritance, lottery win or if the equity in your house rising sharply) you may be required to pay off your debts in full.
The IVA procedure - Ten short steps outlining the procedure of an IVA from start to finish.
Advantages & Disadvantages of an IVA
For more information about IVA’s click here
Please find links to below to websites which contain more information about a range of debt related issues.
Citizens Advice Bureua - Free advice on a number of various issues including assistance with your debts.
The Insolvency Service -Regulators of the UK insolvency profession. Provides information about Bankruptcy, IVAs and DROs and allows completion of court forms online.
Directgov - Money Tax and Benefits- Dealing with debt problems, creditors, arrears and bankruptcy, and find out where to get help or advice about repaying or recovering a debt.
Financial Ombudsman Service - the independent service for settling disputes between businesses providing financial services and their customers.
Conditions apply. Please note that repaying debt over an extended period may increase the total amount of debt to be repaid. Transferring debts to a financial management plan will affect your ability to obtain credit in the short term. Your ability to obtain credit may also be affected in the medium to long term. Dissolve Debt Ltd are fee charging financial management consultants licensed under the Consumer Credit Act 1974, Number: 563918.
Dissolve Debt Ltd is regulated by the Ministry of Justice in respect of regulated claims management activities; our registration is recorded on the website www.claimsregulation.gov.uk number CRM28077
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