Individual Voluntary Arrangements (IVA)

Mark Casey, Bristol

Mark Casey

"It's fantastic! My payments have been reduced from £680 a month to less than £300."

Although IVAs have been around for some time it is only over the last few years that people have been made aware of them and the legislation used to clear debt quickly. We have seen a boom in their popularity and last year over £1 billion was written off through IVAs.

If you are struggling with loans and credit cards then an IVA could be the solution and enable you to write off up to 75% of your debt!

How an IVA works:

  • An income and expenditure assessment is completed by a trained debt advisor. This budget plan ensures that essential bills such as a mortgage or council tax are paid first and establishes how much you can afford to pay towards your debt. During the IVA you will only ever be expected to pay what you can afford towards your debt and monthly payments are usually a fraction of existing repayments.
  • Once the pack is received the initial figures will be confirmed and the IVA contract will begin to be drafted. The Insolvency Practitioner will contact all creditors to explain what is going on and at that point the phone calls and debt collection letters should stop.
  • The IVA proposal is now completed and presented to you and all of your creditors for approval. A date is then set for the creditors meeting. During which the creditors will vote on the proposed offer or suggest amendments to it.
  • With so many IVAs being agreed it is actually rare for the creditors to meet and instead they normally vote via fax. As long as 75% (by debt value) of the creditors vote in favour the IVA is agreed and recognised by law.
  • The whole process can run quite smoothly as long as you choose the right Insolvency Practice. Using a reputable company can help to get the IVA agreed and set up in around six weeks.
  • The IVA will then (normally) last five years and at the end of the agreement any outstanding debt will be written off completely. This can be as much as 75% of the initial amount although typically around 58% is written off.

An IVA allows you to pay one affordable payment each month and avoids the stigma of bankruptcy as it is not advertised in the local newspaper. If you are considering an IVA then why not complete our free debt test. We can then confirm that you qualify and if it is the best way to clear your debt.

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