Individual voluntary arrangements right for you?
Individual voluntary arrangement (IVA) is a formal agreement to repay at an amount you could afford to your creditors.
This could be a one-off payment known as a lump sum IVA or over a long period to spread payments which lasts for five or six years. You make one payment to us each month affordably and then we divide among your creditors fairly. During your IVA creditors should not be allowed to contact you or even increase your debt.
When the final payment is being made, any debt left is going to get written off.
If you live in Scotland, IVAs are made unavailable. In Scotland, a protected trust deed is a similar solution, but it is important to note that it has different fees, benefits and risks along with it.
Other issues to consider with IVA
There are other issues you should consider first before you make the decision to enter into VTA:
- The creditors may back date interest on your debts or may request that the Supervisor of your IVA petitions for your bankruptcy if IVA fail.
- Your spending will get restricted until the IVA comes to an end once your IVA has officially set up.
- You may ask creditors to review the terms you originally agreed to if your circumstances have changed during the term of your VTA. During your IVA you will get an annual review and you may have to increase your payment if your situation has improved.
- The only debts included in the arrangement will be discharged at the end of the agreement.
- Debts such as the money owed under family court proceedings, any court fines or debts arising from fraud, debts incurred after the IVA, or student loans cannot be included and will still be left to pay.
- We do not charge for the advice and support we give before your IVA is set up. There are fees involved in running your IVA. Our fees are set by your creditors and follow the industry standard for IVAs. Before your IVA is approved you must agree to the level of fees. We will deduct the fees from your monthly payment so that you don't have to pay any additional costs.
- If you have been recommended an IVA, you are either self-employed or live in Northern Ireland, you will get referred to a trusted insolvency practitioner who will administer and set up your IVA.
- If you are a homeowner, you will be asked to re-mortgage your property 6 months before your IVA expires. If you are unable to re-mortgage you could make 12 extra payments max or a 3rd party can offer a sum equivalent to the equity as an alternative.
Learn more about IVAs:
Is IVA the right option for me?
IVA may be the right option for you if you can afford to pay something to your debtors, but not the full amount your creditors want. You may also qualify for an IVA If you have a lump sum to pay off your debts.
How does an IVA work?
An IVA is managed by an insolvency practitioner (IP), who can help you with a repayment proposal to send to your creditors. At Free Debt Helpline we have our very own IVA company –Free Debt Helpline with two licensed IPs who will be able to help you with your proposal to suit your personal circumstances.
Your IP will hold a meeting with your creditors whether your creditors decide to either accept or reject your proposals. If your IVA has been accepted it becomes legally binding. As long as you follow the terms and conditions of your IVA, none of your unsecured creditor who did not vote or vote against IVA will pursue you for any debt incurred prior to approval of the IVA. A IVA is a form of insolvency so it is important that you get an expert, impartial advice before entering into IVA.
What are cost of IVA fees?
When you set up an IVA there are always fees involved. The only fees that you will need to pay is a nominee fee which is the fee that will cover the cost of starting up your IVA. The Supervisor fee is for the IVA administration and there are disbursement fees which are costs that we pay to the third party during the IVA.
At Free Debt Helpline our fees are set at the industry standard and we will make sure you are aware of what we are charging. The fees are being paid out from monthly contributions or from proceeds of a sale of assets so there is nothing to pay up front.