FAQs - Individual Voluntary Arrangements

Is an IVA the right solution for me?
To enter an IVA you should have at least 'unsecured debts' of £15,000 and more than 2 creditors. A mortgage, second charge loan or car hire purchase agreement are secured debts so you can not use an IVA to pay off secured debts or tangible objects that can be repossessed. But there are ways that you could re-mortgage a house or refinance a car.

How much of my debts will be written off?
Nowadays it is becoming more difficult to get lenders to agree to write off more than 55-66% of debts with an IVA, no matter what other debt management companies say in their advertising literature. It may be possible to write off up to seventy five percent, but this is becoming rare.

Is an IVA a one size that fits all?
No, an IVA can be set up on the basis of offering a lump sum payment to creditors as opposed to making monthly payments. Some IVA's can be a mixture of the two depending on your circumstances, a lump sum and monthly payments.

What if I own my own home?
You are likely to be required to release the equity in your home, if there is any there, usually in the last year of the IVA

What if I have CCJs against me?
Entering an IVA will avoid further recovery action after a creditor has obtained a CCJ against
you. CCJs can be incorporated into the IVA.

Do creditors have to accept an IVA?
Once you have decided that an IVA is the right option for you a draft proposal will drawn up by a specialist insolvency practitioner for your creditors. He will invite them all to a creditors meeting arranged by him. At this meeting he will negotiate on your behalf with the creditors

What happens at the creditors meeting?
Once the negotiations are over the insolvency practitioner will put it to a vote. If 75% of your creditors 'by value' of those who vote agree to the IVA, then the rest are bound by the IVA, even if they voted against it. Sometimes creditors will argue about the terms of the IVA. Some may ask that you make payments over a longer period, or, ask that your assets are used to raise cash to pay for the IVA - this may mean selling or re-mortgaging your home, or selling your car, or any other asset you may have that can be sold to raise cash.

If I enter an IVA what happens next?
Once the IVA is agreed the insolvency practitioner will supervise the IVA and make sure you make the payments. An IVA can help you avoid bankruptcy, as long as you stick to the payments that have been agreed. It is important that we know the true extent of your debts. Being completely honest with your advisers is the only way they can do their best for you.

How long does it take to set up an IVA?
It will take us about six weeks to set an IVA up for you.

What if a creditor takes further recovery action before the IVA has been approved?
You can apply to the courts for an Interim Order to stop any of your creditors taking further action until the outcome of your creditors meeting becomes known.