IVAs (Individual Voluntary Arrangements)
are a flexible and effective method of dealing
with debt. They provide protection from your
creditors, flexibility and none of the restrictions
that apply in bankruptcy.
An IVA is a debt forgiveness agreement
with your creditors to repay a proportion of
the amount you owe in full and final settlement.
In return for you committing to repay an affordable
part of your debt, your creditors will write
off the balance leaving you debt free.
IVAs were introduced to the UK
as part of the Insolvency Act 1986 as a positive
alternative to bankruptcy that would help individuals
resolve their debt problems. Although
considered to be a rescue tool an IVA will have
an adverse affect on your credit rating for
up to 6 years.
The payments that are offered
to creditors in an IVA can be made from a variety
of sources. The most popular being:
- Affordable monthly payments
from your income
- A lump sum from a re-mortgage
of your property or a third party
- Sale of an asset
- A combination of the
above
The amount you pay will depend
on your disposable income and the amount is
agreed and fixed with creditors up front so
there are no nasty shocks during the IVA. You
will know exactly what you have to pay, and
how long you have to pay for.
For your IVA to be approved a
majority, in excess of 75%, in value, of your
creditors who vote on your IVA, is required.
Once the IVA is approved your
creditors are obliged to freeze interest and
are no longer able to chase you for payment.
Once all of the agreed payments have been made
the IVA is concluded and the balance of your
debt is legally written off leaving you debt
free.
We can advise on whether an IVA
is the right solution for you. We can then work
with you, from formulating an offer to your
creditors, through to seeking approval from
your creditors on your behalf.
Our IVAs are crafted, always with
the core value that they should be sustainable
and achievable, yet realistic. We believe that
this is the only way that an IVA works thus
providing a win/win situation for you and your
creditors.
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