IVA's
Debts over £5,000
Let’s see if you qualify for an IVA
If your debt exceeds £5,000, you have two or more distinct creditors, and you can allocate a minimum of £80 monthly towards settling your debts, you might be eligible for an IVA. Additional considerations, including your property status and current income, must be evaluated to determine your eligibility for an IVA. Explore further details below or check your eligibility for an IVA.
An Individual Voluntary Arrangement (IVA) is a legal procedure allowing individuals to circumvent bankruptcy by reaching an agreement with their creditors to repay their debts over a specified period, typically 5 or 6 years, and often securing a partial write-off. The initiation of this process involves submitting a proposal to creditors, facilitated by the assistance of an Insolvency Practitioner.
How An IVA Works
The monthly repayment amount is determined by analysing your income and expenses. Once agreed upon, these repayments are legally binding through a contract. Failure to fulfill your part of the deal may result in the termination of the IVA, resetting the process. For an IVA to be approved, a minimum of 75% (in value) of the voting creditors must accept the proposal. Once accepted, all creditors must adhere to the IVA terms, even if some initially opposed it. If you own a home, you usually need to release equity in the final year through a remortgage or secured loan. The proceeds are then directed to your creditors. Once creditors agree to the IVA, interest and charges on unsecured debt are frozen. An annual review of your financial situation is conducted by your IVA supervisor. If there's a change, such as a salary increase, your contribution to the IVA may be adjusted. Conversely, if your circumstances worsen, revised terms can often be negotiated. Expect an impact on your credit rating with an IVA. If you're already struggling with repayments, your credit rating is likely poor. For concerns about the effects of an IVA on your credit rating or other matters, please reach out to us.
What Is An IVA
Make reduced payments over 5 or 6 years. Some debts could be completely written off.
What You Need To Know
Failure to meet your repayments in an IVA may lead to the arrangement's failure, returning you to the starting point, and potentially resulting in bankruptcy in certain cases. Homeowners may need to release equity (if applicable) to settle some or all of their debts. If your home is remortgaged for equity release, it could limit your ability to secure a mortgage, likely resulting in a higher interest rate. In the event of difficulties obtaining a remortgage, the IVA can be extended for up to 12 months. Only unsecured debts included in the IVA may be forgiven by creditors at the end of the term. Secured debts must still be fully repaid. During an IVA, you must adhere to spending restrictions and provide proof of income and photo ID.
Fees With An IVA
There are no upfront fees for an IVA. The IVA fees are made up from a Nominees's fee and Supervisor's fee which are included in the monthly payment you make into your IVA. All fees will be disclosed before you start your IVA.
Am I Eligible
You could be eligible for an IVA if you meet the following criteria: You have unsecured debts greater than £5,000 You have 2 or more creditors You can afford to pay at least £80 per month
Bailiff Advice Online is a trading style of My Debt Plan Ltd.
Registered address 2nd Floor Blenheim Court, Cheadle, Cheshire, England, SK8 2JY Company Registered in England and Wales Number 10992838 Data Protection ZB284067.
My Debt Plan Ltd provides insolvency solutions to individuals, specialising in IVA’s. All advice given is provided in reasonable contemplation of an insolvency appointment. Where you are not suitable for an IVA, we may refer you to one of our trusted partners who specialise on alternative solutions.
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Kevin Mapstone is a licensed insolvency practitioner in the UK by the Insolvency Practitioners Association (IPA).
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