What is an IVA?
An Individual Voluntary Arrangement (IVA) is a solution available to people who are suffering with large amounts of debt and are struggling or unable to keep up any repayments due to circumstances such as, illness, unemployment, bereavement, divorce, separation, demotion or any other changes in circumstances. Sometimes the debt levels are just too much and they have spiralled out of control. Financial problems are very common in today's society.
It is an alternative to bankruptcy. It is an agreement between the debtor (you) and the creditors (your unsecured debts) to pay off a percentage of their debt over a given period of time (normally 60 months). An Insolvency Practitioner is required to set up and negotiate the IVA with the creditors. An IVA is a completely legally binding process governed by The Insolvency Act 1986.
Every IVA is unique and individual. It depends on your employment status, income, expenditure, amount of unsecured debts, number of creditors and even your current situation regarding your everyday living. Repayments to the creditors are established by analysing all these factors and coming to a legally binding contract/agreement on the monthly repayments. The IVA will be successful if more than 75% (by debt value) of the creditors involved agree to the terms of the arrangement.
Advantages of an IVA via DPSP Insolvency Specialists
- One easily affordable monthly payment based on your income and expenses.
- Unlike some of our competitors, we do not charge any upfront fees, saving you £100s.
- An IVA offers you protection from creditors.
- Creditor pressure stopped as creditors must deal with Our Professional (Insolvency Practioner).
- Can be complete in as little as 1 year if you can offer a lump sum payment.
- All interest frozen immediately.
- Suitable for tenants or homeowners, individuals or couples, and even business owners.
- We help from our Insolvency Practioner's we can set up an IVA in as little as 4 weeks.
Disadvantages of an IVA via DPSP Insolvency Specialists
- If you are a homeowner with equity in your property you may be required to introduce part of your share of this equity in the final year of the arrangement. A remortgage may be restricted and on less favourable terms. If you can’t get a remortgage your arrangement can be extended for up to another year.
- If your circumstances change, and your insolvency practitioner can’t get creditors to accept amended terms, the IVA is likely to fail. You will still owe your creditors the full amount of what you owed them at the start, less whatever has been paid to them under your IVA.
- If your IVA fails, your creditors may request that you be made bankrupt. This will always be discussed before your arrangement commences.
- Your credit rating may be impacted for up to six years from the commencement of your IVA.
How do I apply?
There are certain criteria a client has to meet for an IVA. This includes a threshold on the amount of debt they have and to how many creditors they owe money. As an IVA is a legal contract before we can put any client into an IVA, we would need to complete a FULL Financial Review. To apply click here
The only way any of your debts can be written off is through the creditor's acceptance of an IVA (Individual Voluntary Agreement). In most cases if your IVA (Individual Voluntary Agreement) proposal is accepted creditors may vote to write off approximately 60% of your debts; however some IVA (Individual Voluntary Agreement) arrangements can lead up to 70% of your indebtedness being written off.
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