Individual Voluntary Arrangement
An Individual Voluntary Arrangement (IVA) is a process used by insolvent individuals where a legally binding agreement is made between the individual and their creditors to make reduced payments over a 3-5 year time period. At the end of the agreed time, the rest of the debts will be written off.
An insolvent individual is someone who has a large amount of personal debt via store cards, credit cards etc. that they cannot pay back as and when the payments are due.
This process is to also be used by a sole trader or un-registered company if they suffer from insolvency.
What is the IVA process?
How will an IVA affect the individual personally?
Not everyone will be suitable to enter into an IVA. The process is more suitable for individuals who are suffering from historic debts but have a regular income, and have a home they want to protect.
The effects on an individual for entering an IVA include:
- Remains on your credit rating for 6 years
- If you miss 3 consecutive monthly payments then your case maybe reverted to Bankruptcy
- Any inheritance, bonuses, pay rises etc. will be requested to be paid into the IVA
- Any equity you have in your home will have to be released 6 months prior to the end of the IVA and added to your last set of payments. This can be done by mortgaging
What is the outcome of an IVA?
At the end of the IVA term any debts left from the agreement will be written off amd a;; debts within the IVA will have been paid as agreed.
What is the cost of an IVA?
The fees will be split into 2 steps.
Firstly you will have a Nominees Fee which is what the Insolvency Practitioner is known as at the beginning of the process.
Secondly you will have a Supervisors Fee which is what the Insolvency Practitioner is known as once the IVA proposals have been agreed to and they begin to monitor the process.
Our fees are quoted based on the individual circumstances of each case.