Individual Voluntary Arrangements (IVA)
An IVA is an alternative to bankruptcy that was set up by the Government to help people in financial difficulty. It is a legally binding contract between you and your creditors. This means that once it is accepted you should not be contacted by them regarding payment of the debt as long as you keep up with the agreed payments.
Advantages
- A single affordable monthly payment over a fixed repayment period (usually no more than 60 months).
- An agreement that your creditors will freeze the interest and stop any charges so your debt balance does not increase.
- Protection from further action by your creditors.
- On completion your creditors legally write off any debt outstanding. (subject to conditions)
Disadvantages
- Should the IVA fail, the debtor can still be made bankrupt.
- You may be required to introduce a proportion of your properties equity into the IVA, usually towards the end of the IVA. If this is unavailable then the IVA maybe extended for a further 12 months.
- 75% of the creditors based on the value of debt have to agree to the IVA by voting at the creditor meeting.
- There are restrictions to certain types of expenditure allowed.
- The Supervisor must be advised of any changes in your circumstances that arise during the IVA.
- Depending on the level of additional income an individual receives, they could be expected to contribute a percentage of this towards the IVA.
Terms & Conditions apply. Third party specialists may be used.