Ideal for:
- Residents of England, Wales or Northern Ireland with unsecured debt of at least £12,500
- Minimum of 3 separate creditors
- Disposable income of at least £200 a month (this may need to be larger depending on size of debt)
How it works:
An IVA or Individual Voluntary Arrangement is a legally binding agreement, under the Insolvency Act, between your client and their creditors. Your client agrees to make one monthly repayment for a fixed period of time (usually 5 years) - the incentive to creditors being that the amount they receive through an IVA will be more than they could expect should your client declare themselves bankrupt.
An Insolvency Practitioner will prepare the IVA proposal, suggest what contributions can be made based on your client's circumstances and put it to your client's creditors. If the majority of creditors accept the terms of the proposal then it becomes binding on all creditors - even those who voted against it. At the end of the agreed period, any money still outstanding will be legally written off with the creditors’ approval and your client will be completely debt-free of the debts included within their IVA and ready to start afresh financially.
Benefits:
- Once the IVA is in place, interest is frozen
- Your client has just one repayment to make each month
- As long as your client keeps to the arrangement, they will be protected from any further action by creditors
- An IVA allows your client to safeguard their house, car and other valuable assets
- Your client can potentially write off a significant proportion of their debt
The Facts:
- Usually, a proportion of any equity in your client's property will need to be made available to creditors and other significant assets may also need to be sold
- A monthly administration fee is charged and is taken from your client’s monthly contributions. The fee we charge is agreed with your client’s creditors and will be fully explained to your client before they commit to this debt solution
- Your client’s credit rating may be affected for a minimum of 6 years
Need more information? Read our Questions & Answers on IVAs.
