IVA (Individual Voluntary Arrangement) FAQ's
What is an IVA?
How long is an IVA?
What debts can I include?
How much debt can I have?
Can I have as many debts as I want in my IVA?
I live in Scotland, but was born in England. Can I have an IVA?
Can I include my mortgage payment?
Do I still have to pay interest?
Who is a Insolvency Practioner?
Do I have to deal with creditors?
What happens if I have an emergency and cannot meet a payment?
Can I stop the IVA and do a DMP instead?
Do I have to be on a Debt Management Programme before I can get an IVA?
Do I have to pay the Insolvency Practioner?
If I win the lottery or inherit some money can I keep it?
Will a Insolvency Practioner find out if I come into some windfall cash and don’t tell them?
Can I keep a credit card for emergencies
What if I forget about a debt?
What is an IVA?
An Individual Voluntary Arrangement or IVA is a debt repayment agreement that you make, with the help of an Insolvency professional, to pay your creditors only what you can afford and then write off the rest.
How long is an IVA?
IVAs run for 60 months (5 years). However, it is possible to cut down the amount of time it takes to pay your IVA if you overpay. If you come into money or do regular overtime, it could be possible to pay off all of the debt much sooner than planned.
What debts can I include?
Only unsecured debts can be included (apart from Student Loans, which were exempted in April 2011); secured debts cannot. The latter are debts generated by loans taken out on goods, such as cars or domestic appliances or furniture, as hire purchase agreements. If you default on these loans, which will happen as a matter of course when you are granted an IVA, the goods can be taken back by the lender to cover the remainder of what you owe.
How much debt can I have?
There is no maximum limit on the total amount of debt you can include in an IVA, although if you have a lot you may find the amount of disposal income you have for debt payments is not sufficient to satisfy your Insolvency Practioner or the creditors. There is a minimum debt limit of £15,000.
Can I have as many debts as I want in my IVA?
You must have three or more debts to apply for an IVA, and often a Insolvency Practioner will consider two debts from the same lender as separate (regardless of whether the lender does or not!).
I live in Scotland, but was born in England. Can I have an IVA?
Only English and Welsh residents of six months or more are eligible for IVAs. Even if you originally hailed from one of these countries, if you currently live outside of them you cannot apply.
Can I include my mortgage payment?
No. Normal monthly mortgage payment cannot be included as this is secured debt. If you cannot keep up your mortgage payments, talk to your Insolvency Practioner as an IVA will not be a suitable option for you
Do I still have to pay interest?
From the day your IVA is approved all that interest and those penalties that your creditors like to heap on to your debt will be frozen for the duration of the IVA. Your debt will not get any bigger.
Who is a Insolvency Practioner?
A Insolvency Practioner sets up and looks after the administration of IVAs. They are usually highly experienced and qualified professionals, such as Insolvency Practitioners who are adept at handling creditors and representing their clients in courts if necessary.
Do I have to deal with creditors?
This is where Insolvency Practioners really earn their money. Once your IVA is up and running, you will not have to deal with creditors at all for the entire period of your IVA. If any do attempt to contact you, you can refer them immediately to your Insolvency Practioner or ask you Insolvency Practioner to contact them and tell them to stop contacting you. You will not have to deal with the stress and hassle of demanding unpleasant creditors any more.
What happens if I have an emergency and cannot meet a payment?
You are only protected from your creditors seeking your bankruptcy or other action against you if you keep up all of your payments. For one-off emergencies like redundancy or illness your Insolvency Practioner can arrange a payment holiday instead of having the IVA fail due to you not being able to pay. As soon as you know you will have a problem, you must tell your Insolvency Practioner so they can talk to your creditors and arrange everything.
Can I stop the IVA and do a DMP instead?
While it seems relatively simple to let an IVA fail by not making the payments any more, in reality if this happens you risk your creditors moving quickly to have you made bankrupt. Having an IVA means you have declared yourself insolvent.
Do I have to be on a Debt Management Programme before I can get an IVA?
There is no requirement for you to have a DMP before you can apply for an IVA, but it is advisable to take professional advice from our debt consultants, as a DMP could be more appropriate for your circumstances than an IVA.
Do I have to pay the Insolvency Practioner?
Yes, Insolvency Practioners are always paid for the service they provide, and they usually charge a set up fee at the beginning plus a fixed percentage fee of each payment that is made to a creditor.
If I win the lottery or inherit some money can I keep it?
If you have a windfall, it is up to the discretion of each Insolvency Practioner as to how much of a windfall you can keep. Some will let you enjoy some of the money, some may insist all of it must go on the debt.
Will a Insolvency Practioner find out if I come into some windfall cash and don’t tell them?
You are required to send your pay slips, bank statements and other financial documents to your Insolvency Practioner regularly to ensure your payment level is appropriate based on your earnings. If you have a windfall, pay rise or a bonus, your Insolvency Practioner will want a proportion of this for your creditors.
Can I keep a credit card for emergencies
Unfortunately, you will not be able to obtain credit while you are doing an IVA. Your credit cards, debit cards and cheque books must be surrendered to your Insolvency Practioner and you will be asked to open up a new basic cash-only current account.
What if I forget about a debt?
Often ‘buy now, pay later’ debts end up being forgotten, but cannot be simply rolled up into an IVA automatically. A Insolvency Practioner can apply for a variation of the IVA and request it be brought in subject to creditors’ agreement and your ability to increase your payment to cover this if requested.
|
No credit checks
Use our Free Calculator to see if you qualify... 
