Individual Voluntary Arrangements

What is an IVA?

It is the name given to a formal arrangement with creditors. It is a legally binding structured repayment plan which benefits both you and your creditors.

It allows someone who is in financial difficulty to make a proposal to settle his/her debts within a reasonable and fixed period – normally five years.

Does it mean that my debt is reduced?

Yes in most cases, but it will depend on a high proportion of creditors agreeing to reduce the debt.

Is it a loan?

No, it is an arrangement which is negotiated between you and your creditors to pay either a lump sum or as is more usual, an affordable monthly payment over an agreed period.

How much will my monthly payments be?

This all depends on your circumstances; your monthly contribution is based on your entire household income & expenditure, therefore will be affordable for you. You will be required to set up a standing order with your Insolvency Practitioner, which will then go in to your IVA account.

The majority of Individual Voluntary Arrangement (IVA) cases are structured around one, affordable repayment each month, over a period of 60 months. This payment is carefully calculated with the debtor’s assistance and takes into account ALL of their assets and liabilities, their income and their cost of living expenses.

The amount payable to creditors is determined by the amount that the debtor can reasonably afford to pay into the Individual Voluntary Arrangement (IVA), after their normal cost of living expenses have been deducted from their income. This will ensure that the debtor never gets into arrears or misses paying any of their priority commitments such as their mortgage or rent, car finance, utility bills, council tax, etc.

How much are the charges?

Charges will vary according to the amount of debt and repayment period. However, they are included in the monthly payments and you will be informed of these charges when the arrangement is agreed.

Requirements to Maintain an IVA

• You will be required to stick to the IVA for the full term – dependent on circumstances.
• All assets must be declared, if you own assets of excessive value your creditors can ask that they be realised for their benefit.
• It will usually be necessary to release some of the equity in your property in the 4th year of your IVA.
• You must declare any windfalls, inheritance or pay increases to your (supervisor) Insolvency Practitioner.
• If you bank with one of your creditors you will need to open a new bank account.

Advice Request Form