Individual Voluntary Arrangement (IVA)
What is an Individual Voluntary Arrangement (IVA)
IVA's were first introduced as a solution to problem debt in 1986 and are designed to make debt repayments more manageable and affordable. These schemes must be set up by an Insolvency Practitioner (IP) and are formal, legally binding agreements in which you pay back all or part of your debts.
This can be a one-off payment known as a lump sum IVA or affordable monthly payments over a longer period which usually lasts five or six years. What you pay is calculated based on your income & expenditure, allowing you to live your life reasonably and without worry. During your IVA creditors should not contact you or increase your debt.
The arrangement is put together to prevent any additional interest and charges being added your existing debt and once agreement is made the creditors can't change their mind.
When the final payment is made, any remaining debt is legally written off.
Things you should consider before entering into an IVA
- Should the IVA fail, creditors could back date interest on your debts or may request that the Supervisor of your IVA petitions for your bankruptcy.
- Once your IVA is set up, your spending will be restricted until the IVA comes to an end.
- Should your circumstances change during the term of your IVA, you may ask creditors to review the terms you originally agreed to. During your IVA you'll receive an annual review and If your situation has improved, you may have to increase your payment.
- At the end of an arrangement, only debts included in the arrangement will be discharged.
If you think an IVA could be the solution for you call us on 01656 661426 or
fill in the Contact form and we will get back to you