About IVAs
An IVA (Individual Voluntary Arrangement) is a government approved initiative for people who are in severe debt, who do not see their situation improving in the near future.
An IVA (Individual Voluntary Arrangement) is a form of Insolvency and is a more formal agreement with your creditors that is legally binding. This formal arrangement ensures that the creditors will not take legal action against you, contact you or increase the balance as long as the agreement is maintained and the IVA is in place.
How does an IVA work?
In an IVA (Individual Voluntary Arrangement) you only make a payment that you can afford and you agree on. Payments are typically fixed and therefore ideal for people with steady jobs and fixed incomes, who are able to commit to the IVA for the usual 5 year period.
As an IVA (Individual Voluntary Arrangement) is a form of Insolvency, an Insolvency Practitioner will administers and organise the process. An Insolvency Practitioner, or an IP is an IVA specialist and as such is licensed and regulated. We use Carrick Read Insolvency in Hull to administer our IVA cases.
If you are eligible for an IVA (Individual Voluntary Arrangement) the Insolvency Practitioner will call a meeting of creditors and negotiate the terms of the IVA based on the amount of debt you have and the amount you can pay each month. If 75% or more of the creditors accept the terms of the IVA it is then approved and all creditors are bound by the terms.
Does debt get written-off in an IVA?
In the creditors meeting your Insolvency Practitioner will negotiate discounts on your debts. The discounts are given upon successful completion of the IVA (Individual Voluntary Arrangement) and can be from around 30%-45% of the debt, making a total discount of 55%-70%.
Do I need an IVA?
If you have a substantial amount of unsecured debt, usually around £15,000 or more and are struggling or behind with payments, an IVA (Individual Voluntary Arrangement) could be your best debt solution.
An IVA acts as a legally binding agreement between you and your creditors, effectively freezing interest and charges in return for monthly payments over an agreed fixed period, usually 5 years. Credit Cards, Unsecured Loans, Overdrafts and Payday Loans are able to be included in an IVA. Crown Debt and secured debts are not typically accepted in an IVA.
Am I eligible for an IVA?
There are many factors to take into account when deciding if someone is eligible for an IVA (Individual Voluntary Arrangement) and we have included some of the main point that are considered below
- Are you a homeowner with equity?
- Do you have a steady and secure income?
- Do you have any unnecessary or unmanageable assets?
- Is your monthly expenditure reasonable?
- Can you afford an IVA? (see bellow?)
When considering if an IVA (Individual Voluntary Arrangement) is right for you, an Insolvency Practitioner will consider all of the above and advice on what is acceptable and unacceptable. As a form of Insolvency and subject to legal process before processing an IVA all considerations must be taken into account.
Who much do I pay in an IVA?
An IVA (Individual Voluntary Arrangement) is typically one payment each month over 5 years. The total you will pay depends on the Insolvency Practitioners Fees and the final discounts agreed with your creditors.
We have provided an example of a typical IVA bellow
- Total Debts £50,000
- Term of IVA 5 years
- Discount 65%
- Payable 35%
- Total Payable including IVA fees £24,000
- Monthly Payment £400
If you are realistically able to commit to paying 45% of your debts over 5 years then you are probably able to afford an IVA (Individual Voluntary Arrangement) an all associated fees. A good Insolvency practitioner may be able to get a considerably lower rate, but if you would not usually pay more than 45%. However, an IVA is a form of Insolvency and therefore subject to legal process and approval and being able to afford an IVA does not mean you are necessarily eligible.
What do I do now?
If you are considering an IVA (Individual Voluntary Arrangement) or any other form of Insolvency or Debt Management then we would be happy to hear from you. If you live in Hull or around Hull then we can arrange a meeting to discuss your options. Meetings are free and there is no obligation to proceed by arranging a meeting. For further information or just some friendly advice call either 08009 247 244 or (Hull) 01482 247 999. We are based on Wright Street, Hull, in Hull City Centre.
Why choose Fresh Start?
Subject to eligibility and acceptance. Conditions apply. Debt write off applies only on completion of an IVA, (Individual Voluntary Arrangement) alternative Debt Solutions may be offered. Each IVA (Individual Voluntary Arrangement)application is assessed on an individual basis, once the preliminary work is carried out the case is passed to our Insolvency Practitioner at a local Solicitors firm to administer. No advice is provided by Fresh Start UK. Fees payable for continuing services. Your ability to obtain credit will be affected for 6 years. Homeowners may be required to release the equity in their property. Calls may be recorded.