What is an Individual Voluntary Arrangement [IVA]?
An IVA is a legally binding contract between you (the Customer) and the people who you owe money to (the Creditors), which is Supervised by a Licensed Insolvency Practitioner (the Supervisor/us).
The purpose is for you to reach an agreement with your creditors and avoid the consequences of being made bankrupt. The agreement will involve you paying an agreed percentage of your debts through affordable monthly contributions to the Supervisor, with your creditors agreeing that they will write off the rest of your debts.
At the end of the IVA term (usually five years), once you have made your final contribution into your IVA, the Supervisor will issue you with a certificate which confirms your compliance with your IVA and the debts in your IVA are written off.
Unlike the informal Debt Management products, an IVA is a legally binding contract between you and your creditors – so as long as you do everything which you agree to do in your IVA, then your creditors cannot continue to chase you for the amounts due and cannot make you bankrupt.
Who can benefit from an IVA?
An IVA is available to all individuals, sole traders and people in partnerships who are experiencing creditor pressure such as demands and threats of legal action, who live in England, Wales or Northern Ireland (Scotland has its own equivalent procedure known as a Protective Trust Deed or PTD – see the Scotland Rules! section of our website for further information).
If you are struggling to pay your debts and don’t have enough surplus money to keep all of your creditors happy, if your debts are causing you stress, then an IVA could be for you.
How does an IVA work?
A document called an IVA Proposal (Proposal) is put together which outlines your personal financial position and what you can afford to pay to the Supervisor each month. This Proposal is sent to your creditors for them to review what is being proposed and then decide whether or not they accept. If 75%, by value, of your unsecured creditors are in agreement with your Proposal, it is approved and all of your creditors are bound by its terms – this means that they can no longer chase you for the amount owing, ask you for additional payments or charge interest on the debt.
So long as you keep up your end of the bargain, pay the monthly amounts due and comply with all other terms of the Proposal, once your final payment is made you will be fully discharged from all debts included within your IVA and you will be debt free.
Interested? Get in touch today!
So, you are interested in an IVA and you think that it might be the right option for you.
If you use our Save Me request form, this will allow us to give you best advice, by phone at a convenient time for you.
Alternatively, you can give us a call on 0808 164 3750 (Freephone) and we will be happy to have a chat with you.
When you speak with one of our DebtChampion advisers you will be made aware of all the do’s and don’ts, maybes and what if’s. It is our job to make sure you are advised of the best solution for dealing with your debts, whether or not it is a product which we can offer.
Please feel free to spend as much time as you like having a look around our website if you would like to know a little more about Us, the Advantages & Disadvantages of an IVA or the IVA Procedure. We have also put together some Common Questions which you might find helpful.