IVA

An Individual Voluntary Arrangement (IVA) is a formal debt resolution established between you and your creditors, designed for situations where you're unable to afford your debts. It enables you to repay your debts through manageable monthly installments over a predefined period, typically around 60 months. This legally binding agreement provides protection from creditors and may facilitate the write-off of some unmanageable debt. Upon successful completion of your IVA, any outstanding balances within the arrangement are typically forgiven. The specifics of debt reduction in an IVA are tailored to your unique circumstances, contingent upon factors such as your total debt, affordability, and creditor agreement.

Here's an example of how an Individual Voluntary Arrangement (IVA) works

In the following scenario, the individual reached out to us, expressing their inability to sustain the contractual payments of £523 per month towards debts amounting to £18,240. Upon assessing the suitability of an IVA, we presented their proposal to creditors, indicating their capability to contribute £180 per month towards the IVA. The creditors accepted the IVA proposal. Over the course of 60 monthly payments into the IVA, our client will have repaid £10,800 to their creditors. Upon completion, the remaining balance of £7,440 will be legally discharged.

Unsecured Debts
Credit Card	£4,842
Credit Card	£2,687
Credit Card	£3,241
Loan	£5,125
Payday Loan	£902
Payday Loan	£643
Overdraft	£800
Total Debt	£18,240

IVA Example

Commencing an IVA with our assistance

An IVA may be appropriate for individuals with debts totaling approximately £8,000 or more owed to two or more creditors, and who can commit to paying at least £90 per month towards the arrangement. To determine if an IVA suits your circumstances, one of our advisors will reach out to you via telephone to discuss your situation and offer guidance on managing your debt. We will request information regarding your income, expenses, total debts, and any other pertinent details to provide tailored advice. Subsequently, you'll have the opportunity to decide how you wish to address your debt.

If you opt to pursue an IVA, you'll need the expertise of a licensed professional known as an Insolvency Practitioner (IP). An IP possesses the legal qualifications to prepare, negotiate, and manage an arrangement on your behalf.

The Insolvency Practitioner (IP) will draft your IVA proposal document and distribute it to creditors for their review. Creditors will then vote on your proposal, facilitating negotiations between us and your creditors. Typically, an IVA can be established within 4 weeks from your initial contact with Quick Debt Fix. Upon approval of the IVA, you are legally safeguarded from your creditors, allowing you to commence your agreed monthly payments into the arrangement.

If you'd like to learn more about an IVA, please give us a call at 0799 955 9004, and one of our advisors will gladly assist you.

Advantages of an IVA

Monthly payments based on what you can afford
No upfront Fees
Legal protection from creditors
Interest and charges frozen on approval of your IVA
We can set up an IVA in as little as 4 weeks
Suitable for tenants or homeowners, individuals or couples, and even business owners

Disadvantages of an IVA

Your credit rating may be affected for up to 6 years
Your details will be recorded on the insolvency register
If your IVA fails, your creditors may request that you be made bankrupt.
If you are a homeowner with equity in your property you may be required to introduce part of your share of this equity in the final year of the arrangement. If you can't get a remortgage, your arrangement can be extended for up to another year.

FAQ's- Individual Voluntary Arrangement (IVA)

Below are a few of the frequently asked questions we are asked in relation to our IVAs. If you have any questions please feel free to get in touch and we will find the answers you need.

Can anyone propose an IVA?

An IVA is an agreement to repay your debt at a level suitable for you and agreeable to your creditors. Each IVA is unique and tailored to your indivdual situation and has no 'set' criteria. To determine if you are eligible to propose an IVA, contact us.

What debts can be included in an IVA?

Debts that may be included in an IVA are (this list is not exhaustive)

Loans
Overdrafts
Credit Cards
Utility Arrears
Council Tax Arrears and current year
Catalogues
Store Cards
Payday loans
Debts to family and friends
Debts for professional services, i.e. solicitors, accountants, vets etc
Some debts owing to HMRC for tax and national insurance arrears or tax credits overpayments

How long does an IVA last?

An IVA will usually last for 60 months. As stated above it can be tailored to suit your circumstances, so in some cases an IVA may be shorter, if you can repay the debt before the 60 month period. In other cases the IVA may run for longer than 60 months, if you run into difficulty with payments or you own a property with equity.

What if I own my own home?

You can do an IVA if you are a homeowner. If you have equity in your home you may be required to release some of it in the last year of your IVA. If this is not possible, then your IVA could be extended for up to 1 more year.

Are there different types of IVA?

There are a few different types of IVA which can be proposed depending on your circumstances. Each of these IVAs have been outlined below.

Single IVA

A single IVA is a proposal solely in your name. It covers any debts in your name and any joint debts that you may have. The terms of the IVA will be dependent on your circumstances and the monthly payment will be based on your individual income and expenditure.

Interlocking IVA

An interlocking IVA is when two individuals propose separate IVAs that are mutually dependent on each other. When the IVAs are accepted they become interlocking and all creditors for both parties are paid from one joint monthly payment.

Lump Sum IVA

A Lump Sum IVA is usually a shorter term IVA with creditors receiving payment via a "one off" lump sum which may be money from a remortgage or family member for example. The duration of an IVA such as this can be as little as 12 months.

Assisted Payment IVA

This is usually a single IVA where you can receive assistance towards the monthly payment from their partner or spouse. As with a single IVA, it covers any debts in your name and any joint debts that you might have.

Self Employed / Sole Trader IVA

If you are self employed or operate as a sole trader then you can propose an IVA that will deal with both your personal and business debt, including any debts that you may owe to HMRC. This type of IVA could help your busines continue trading.

Do creditors have to agree to my IVA proposal?

When you propose an IVA, your creditors are sent a proposal document to consider. They are invited to vote on this proposal at the "Creditors Meeting" to confirm if they are willing to accept your offer of repayment. At this meeting, if more than 75% (by debt value) of the total creditors who lodge a vote, choose to accept your propsal, then the IVA is approved and becomes legally binding on all creditors in the arrangement, including those that did not lodge a vote.

From time to time, some creditors may put forward modifications for you to agree to, before accepting your proposal.

What happens when my IVA is approved?

When your IVA is approved your monthly payments will commence at the amount agreed between you and your creditors. We will supervise the running of your IVA for it's duration, to ensure that you adhere to the terms agreed. You will be required to maintain contact throughout the term of your IVA and you must advise us of any changes in your circumstances. You may continue to receive correspondence from your creditors for up to 8 weeks following the approval of your IVA. This is usually for information only and you can direct any threatening correspondence to us.

How long does it take to set up an IVA?

We can have an IVA set up for you in as little as four weeks providing you have all necessary documents returned to us promptly.

Do I have to change my Bank account?

If it is possible for you to continue banking with your current provider, then there would be no reason for you to have to change. If you have any outstanding debts with the same provider as your bank account, we would advise that you open a new bank account with a provider that you do not owe money to. The reason for this is that in some circumstances, a bank will freeze your banking facilities when notified of your IVA.

What if my circumstances change during the IVA?

You must contact us immediately to advise of any change in circumstances. The terms of the IVA can be adjusted to take these changes into account and where necessary a reduced payment can be proposed to your creditors. If your financial circumstances change for the better, then you will be expected to offer creditors a more favourable return where possible.

What happens on completion of my IVA?

You will receive a "Certificate of Completion" from us advising that your IVA is completed and you have satisfied your debts. Creditors will be asked to update their systems showing the completed IVA, which in turn should assist with the repair of your credit file.

What happens if my IVA fails?

If you fail to adhere to the terms of the arrangement, then your IVA could fail and in some circumstances creditors will ask that you be made bankrupt. It is therefore imperative that you maintain contact with us at all times to try and avoid this happening.

What if I have CCJ's against me?

A CCJ does not impact your ability to propose an IVA. If your IVA is approved, any creditors that have a CCJ against you will become legally bound by the terms of the IVA and cannot pursue any further legal action against you whilst your IVA is in place.

Will my credit rating be affected?

Yes. When you enter into an IVA your credit rating is affected right up until your IVA is complete. ON completion your credit rating will begin to repair itself.

Can a creditor take legal action against me before the IVA is approved?

If you are at threat of legal action being taken against you, or you have an impending bankruptcy hearing, then an application can be made to court for an Interim Order to protect you from your creditors until your IVA is approved.

Apply for an IVA

If you would like to discuss your options and find out if an IVA is suitable for you, then click here to fill in the IVA Application form. One of our advisors will be happy to chat with you and guide you in dealing with your debt.

IVA