Normally any type of unsecured debts can be included within an IVA. This rules out mortgages and secured loans. It also doesn’t include any items on hire purchase, which will be repossessed if you can’t afford the repayments.
Other debts which cannot be included in an IVA:
Personal debts to HM Revenue & Customs and VAT can be included. Debts such as Rent and fines will normally have to be paid and provision for the repayment of these debts will be made separately.
Call us or fill in our contact form so that one of our trained advisors can assess your circumstances. If an IVA is your most suitable option and you decide to proceed then we will work in conjunction with our insolvency Practitioners, Debt Support Centre to assist you in preparing your IVA proposal to be issued to your creditors. The whole IVA setup process can take as little as 4-6 weeks from your application.
An IVA requires a Licensed Insolvency Practitioner to take on your case and approve your proposal as being fair to your creditors. Once the proposal is approved by your creditors the Insolvency Practitioner will also Supervise your IVA and deal with creditors for the duration of your Arrangement. Insolvency Practitioner fees can vary from case to case.
There are two fees involved in an IVA known as Nominee Fee and Supervisor fee. The Nominee’s fee covers the costs involved in setting up the IVA and the Supervisor’s fee is charged for the work done by the Insolvency Practitioner and his or her staff until the IVA is completed. The fees are not paid upfront and will always be taken from your monthly payments. These fees will be clearly set out in your Proposal that you sign before the proposal is sent to your creditors.
An IVA is normally proposed to creditors over a 5 year period and no more than 6 years. However, an IVA can complete earlier depending on personal circumstances. An IVA is a specific proposal relating to your debts and therefore the terms of an IVA proposal can vary from case to case.
If you decide to proceed with an IVA, fees will be charged. We are committed to providing an excellent service. Click here for more information about our fees.
For your IVA to be approved, 75% (by debt value) of your unsecured creditors who vote have to accept the IVA. Providing your IVA is approved, creditors who voted to reject the IVA or chose not to vote will all be bound by the terms. If you think of it like a general election. If you chose not to vote for your preferred party then you chose to go with the majority.
An IVA is designed to protect your home from creditors. If you are a homeowner, you may be expected to make reasonable efforts to release equity in the final year of an IVA using a remortgage or a secured loan up to a maximum value of 85% of your property’s market value at that time. Affordability assessments will be conducted with your Insolvency Practitioner at the time to ensure that any remortgage or secured loan is affordable.
If you cannot obtain a remortgage or secured loan with affordable repayments the IVA contributions payment term may be extended by 12 months.
A change in personal circumstances could affect your ability to meet your payments under the terms of your Arrangement and in these cases it is important you notify your Insolvency Practitioner immediately to discuss your options.
If you have suffered a reduction in income or increase in expenditure and need to reduce your repayments then your Insolvency Practitioner can use discretion in most cases to grant a reduction in payments. Loss of income through unemployment which renders you unable to make even reduced payments can be dealt with by offering you a payment break.
In cases where a significant change has occurred or your Insolvency Practitioner does not have discretion under the terms of your Arrangement it may be necessary to seek creditors agreement to reduce your payments or offer a short term break. It is also possible if you have successfully completed a large proportion of the term, to ask your creditors to conclude the Arrangement earlier than anticipated with payments made being accepted in full settlement of your debt where no short term improvement to your circumstances can be forseen. However, if you do not maintain payments under the terms of your arrangement and cannot reach an adequate resolution with your Insolvency Practitioner and or creditors, your Insolvency Practitioner will be obliged to terminate your Arrangement and notify creditors that the Arrangement has been breached.
This is likely to mean that because a significant proportion of your payments will have been used to pay the costs of the Arrangement the amount you owe to your creditors may not have reduced. Your creditors will be able to recommence collection activity for the balance owed to them plus interest and costs.
An IVA will remain on your credit file for a minimum of 6 years. If your IVA lasts for longer than 5 years it will remain on your credit file for 12 months after it has completed. The Insolvency Service will then inform the credit reference agencies who will remove the IVA and all the debts that were included in it from your credit file.
During your IVA you have agreed not to obtain further credit. When your IVA is completed, it will remain on the credit reference databases for a further year, which is likely to mean that credit may be difficult to obtain during this period.