IVA Helpline: 0800 368 8133
Follow Us:

What Is An Individual Voluntary Arrangement?

Freephone Helpline
0800 368 8133

  • Home
  • What Is An IVA?

What Is An IVA, Is It Right For Me?

This section covers "what is an IVA" (Individual voluntary arrangement) and provides a guide to whether you qualify for an IVA as an alternative to going Bankrupt.

what is an IVA

So what is an IVA?

An IVA is short for Individual Voluntary Arrangement.

Here are the basics of an IVA:

  • In an IVA, a single, affordable monthly payment is agreed between you and your creditors.
  • These payments are usually made for 5 years.
  • These payments are then divided between the unsecured creditors/debts included within the arrangement.
  • All interest and fees on your debts are frozen by law.
  • At the end of an IVA, any outstanding debts included within the IVA are written off.
  • Your creditors can not take further action against you and can not contact you about your debts.
  • Creditors benefit from IVAs as well as you, as they usually get more money back than if you went bankrupt.

...and in a bit more detail:

Basically it is a contract between you and your creditors, in order to reduce your monthly payments on unsecured debt such as personal loans, credit cards etc. to a more manageable level.

An IVA seeks to protect your family home and other assets like your car from your creditors. It is an alternative to bankruptcy.

You pay an agreed amount each month or week, based on what you can actually afford to pay.

You agree to pay this amount for a fixed amount of time, usually five years.

Once your IVA has been set up, your creditors will agree to freeze interest and will not be allowed to contact you about your debts.

So letters, phone calls, text messages and all debt collection activities (including bailiffs) stop.

An IVA is often described as an alternative to bankruptcy.

IVAs have to be administered by a licensed insolvency practitioner or IP for short. They are usually a qualified lawyer or accountant.

For the IVA to go ahead, at least 75% of the total value of your debts must agree to it.

If they do, the details of your IVA are filed in court and displayed on a publicly accessible online register, the Individual Insolvency Register.

www.insolvencydirect.bis.gov.uk/eiir/ .

At the end of the IVA, as part of the contract, and in return for paying back what you could realistically afford each month, the rest of your unsecured debt is legally written off by your creditors.

So after five years, when you finish your IVA, you are debt free.

What are the minimum criteria for an I.V.A?

  • Two or more creditors
  • Struggling with payments
  • More than £5,000 of unsecured debt
  • Demonstrable proof of circumstances
  • UK citizen (IVA specific for England and Wales)

How do I start an IVA?

You will firstly need to take the IVA test to find out if you could qualify for an IVA. An adviser will then work with you to determine your present financial situation. They will then draw up the proposal which is forwarded to your creditors, allowing you to get your finances back on track.

Are they Government backed?

If you’ve been Googling 'what is an IVA?' then you will have seen some attention grabbing adverts like the ones below, they are all over the Internet.

"Government IVA Scheme - Write Off Unaffordable Debt?"

"Government IVA Scheme - See If You Qualify"

"Government Debt Help UK - Write Off Up To 85% Of Debts?"

BEWARE!

IVA’s are NOT a government backed scheme - but this is often falsely claimed in the advertising used by some debt management companies.

The Insolvency Service, which is the government department which looks after insolvency, has issued a warning over marketing companies advertising IVAs as Government backed schemes.

The FCA also believes some people are being misled through such advertising and may, ultimately, find themselves being subjected to poor standards of debt advice, typically given by the companies using such false claims.

So if you see an advert or are called by a company offering a "Government IVA Scheme", you should run a mile.

If you feel you've been approached by a company like this you should contact us.

We will help you check an IVA is right for you, before you become the next victim of bad advice, and pushy salesmen.

So to be be clear, IVAs are not managed by the Government.

IVAs actually form part of an Act of Parliament.

They were introduced as a alternative to bankruptcy as part of the 1986 Insolvency Act.

The law governing IVAs forms part of the UK's statute, so they are part of UK law, which is a little different than being a Government IVA Scheme, or Government Debt Help.

If you set up an IVA it will be looked after by an Insolvency Practitioner not the Government.

IVA, do you qualify?

Our specialists can quickly advise whether you qualify for an IVA. Simply call the team FREE on 0800 368 8133.
Alternatively take the online IVA test and check if you qualify.

What is the cost to setup an IVA?

WARNING: NEVER, EVER PAY AN UPFRONT FEE OR SET UP FEE FOR AN IVA.

Before entering into an IVA, you need to be aware that fees are involved.

The cost of setting up and running your IVA are paid by your creditors to your Insolvency Practitioner (this is the person who manages the IVA process on your behalf) out of the money that you contribute each month.

So if you are paying £120 a month for 60 months, the TOTAL COST of the IVA to you is £7200.

The costs of setting up and running the IVA should come out of this £7200, not be added on to it.

Basically, your creditors are agreeing to accept less money back in order to pay your IP.

Our Insolvency Practitioners do not charge for our advice and we do not charge upfront fees as we believe this to be unethical. So you will never receive a bill from us.

Only if your IVA is accepted will we receive any payments for fees. If your IVA is not accepted then you pay nothing.

The only exceptions to this are if you get a significant windfall during the IVA (such as a lottery win, inheritance, or compensation payment) and are able to pay back your debts in full or if your IVA fails. If this happens, your creditors may require you to contribute an amount to cover fees on top of your debts.

IVAs are a great debt solution for tens of thousands of people in the UK each year.

However, entering an IVA has significant professional and legal implications, which must be fully understood before any decision is made.

  • Last updated 15 December 2015

Average family debt surges by £4,000

Average family debt surges by £4,000

  • by Emma
  • January 13, 2016
Read

Average Family Debt Increased By £4,000 In Last Six Months Family debt has risen to an average of £13,520 owing to the availability of cheap credit, a report by Aviva suggests....


dealing with debt collectors

How To Deal With Debt Collectors

  • by Brian Jackson
  • March 03, 2016

Have you received a letter or call from a debt collection agency. In this guide we'll expain how to deal with debt collectors...

Read


attachment of earnings

A Guide To An Attachment of Earnings Order

  • by Admin
  • June 23, 2015

Have you received a letter threatening an attachment of earnings. In this guide we explore what an attachment of earnings order is, how they work and how to defend...

Read

Contact the IVA Advice Team:

debt helpline 08003688133

0800 368 8133

(freephone, including all mobiles)
IVA advice

Request A Callback

No time to talk, we'll call you back.
IVA questions

Have A Question?
Ask an expert now.

Need IVA advice? Our team of experts will send you their answer by email within 1 working hour.

Latest testimonial

Fantastic,they are life savers.

I Contacted them at 5 pm on a Thursday night,they arranged a meeting Friday morning with all the relevant bodies their because my case was the following Monday .I can't sing their praises high enough they contacted the courts same afternoon. Fantastic response, I avoided bankruptcy on the Monday and was given time to arrange an Iva. I risked losing my home,my mother and fathers home all hope seemed lost until I made that fateful phone call. I can now sleep at night.

Darren
Contact Us
  • Address: Digital World Centre, 1 Lowry Plaza, The Quays, Salford, Manchester, M50 3UB
  • Phone: 0800 368 8133
  • Email: [email protected]
  • Monday - Friday: 8:00 am - 9:00 pm
    Saturday - Sunday: 10:00 am - 4:00 pm

You can also get free impartial debt advice by following this link to the Money Advice Service.

Baker Adams Advisory Limited © 2018 All right reserved.
Registered office: 6 Abberley Hall, Chelford Road, Alderley Edge, SK9 7TJ. Registered in England and Wales. Co Reg No. 11246301

Baker Adams Advisory provides insolvency solutions to individuals throughout the UK; specialising in IVAs, CVAs, Liquidations, Protected Trust Deeds, Bankruptcy, Sequestrations. We do not administer or provide advice solely relating to debt management products, such as Debt Management Plans or Debt Payment Plans under the Debt Arrangement Scheme. We only provide advice after completing or receiving an initial fact find where the individual(s) concerned meets the criteria for one of our insolvency solutions, therefore, all advice is given in reasonable contemplation of an insolvency appointment.