What is an IVA and How Does It Work?

IVA

An IVA is a contractual agreement between yourself and your creditors which is set for you to pay either all or part of your debts. Under this agreements you agree to pay a set monthly fee to an insolvency practitioner who then divides the money between your creditor’s or Individual Voluntary arrangements are almost the last possible solution before bankruptcy. When a person enters into an IVA , it is a contractual agreement that is recorded on your credit file and has its pros and cons depending on the situation you are in. One of the advantages are that an IVA gives your more control of your assets compared to bankruptcy

Anyone considering an IVA must carefully analyse their situation and may be speak to a debt advisor who can give professional debt advice.

There are many organisations that offer Free Debt Advice and can help provide you with information on your Debt situation and will allow you to reach a decision on whether an IVA or an Individual Voluntary arrangement is right for you

Get an IVA (Individual Voluntary arrangement

In order to get an IVA you must instruct an Insolvency practitioner. The insolvency practitioner whom you decide to work with will calculate how much you can afford to pay and how long the IVA will last(normally 5 years)

Once it is agreed that you qualify for an IVA and that it is the best solution for your individual needs,, the Insolvency practitioner will contact your creditors and and hold a meeting with them(not literally) but on paper. The IVA starts providing 75% of your creditors agree to the IVA and it will then apply to all your creditors including those creditors who disregard this.

Benefits of an IVA

An IVA will stop creditors form chasing you or writing to you. This will also freeze any further interest being added to your debts

Cost to Set up an IVA

Normally there are 2 types of costs incurred when arranging an IVA . These costs include the initial set up fee and a handling fee . Both fees are normally included within your agreed monthly payment

Will an IVA adversely affect my Credit file

I am due Compensation for an accident i was involved in, will i get that award?

In short yes. The IVA shows on your credit file and it will affect your credit rating

No. All your compensation will go directly to the Insolvency practitioner and you will not get any of the award.

Where can i get a list of Organisations that can help me with Free Debt Advice?

Most organisations that can offer this service can be found on the Financial Conduct authority Website. Example of firms that can assist you with such a service are Citizens Advice Bureau and the Money Advice Service

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Debt Management Companies: Which is Best for You?

Debt Management Companies

Karen Wilde, 46, from Manchester always lived in fear of phone calls. She also panicked whenever she had a knock at the door. They used to come or call every day, she would say, it was driving me “crazy “and it was during one of those visits by debt collectors that she finally had a meltdown and asked the debt collector to leave.

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