An individual voluntary arrangement (IVA) is a legally binding, formal, and affordable agreement between you and your creditors that stipulates how part or all of your debt will be settled within a given period. It is not bankruptcy but rather a form of insolvency that will offer you more control over your assets. A qualified professional called an insolvency practitioner, who can be an accountant or lawyer, usually sets up an IVA. Debt management companies can also offer similar services.
An IVA set-up involves working out the amount of repayable debt and how long the agreement will last. During the setting up of the IVA, an insolvency practitioner will require details regarding your assets, income, debts, and creditors. An insolvency practitioner will help you in determining if an IVA is the most befitting or appropriate solution to your debts. If they feel that your creditors are not likely to approve the IVA, they may recommend other alternatives such as bankruptcy. After the set-up, the insolvency practitioner will get in touch with your creditors. An IVA becomes active once creditors who hold 75% of the total debts agree to it and subsequently applies even to those who did not offer approval.
Depending on your financial situation, an IVA may be the appropriate solution or option to your debt problem. In such a case, a Statement of Affairs is usually drafted as per the financial information you had provided. It provides a consolidated view of your present financial position and is the foundation of the IVA proposal. It has details such as creditors’ information, income, expenditure, and evidence such as bank statements and slips. The insolvency practitioner who acts as your nominee may opt to apply for an interim order. The interim order is a legal injunction that protects you from any further legal action from your creditors as your IVA awaits consideration.
Upon the consideration of the IVA, a proposal is given to you. If you are satisfied with the terms, the IVA is sent over to various parties including all your creditors, the insolvency service partner, and the local court. The proposal normally spells out details such as the meeting of creditors. Alterations can be requested before or during the meeting. The meeting can always be adjourned if your creditors need more time or information to consider the proposal. During the meeting, the creditors are required to vote in favour or against the IVA proposal. If approved by creditors holding a debt value of 75%, the information is distributed to all relevant stakeholders. A supervisor, normally the insolvency practitioner, is also appointed and tasked with the monitoring of monthly payments to creditors. The supervisor also ensures that everyone abides by the IVA terms as spelt out in the agreement.
Monthly payments should always be made for the entirety of the agreed period. At the end of the period, you will be cleared of your legal liabilities. It is important to keep in mind that IVAs do not cover all types of debts. Some debts cannot be settled under an IVA agreement. While most types of debts can be included in the agreement, secured ones such as child support, student loans, mortgages, and fines can only be settled outside the IVA. Some of the debts that can be included in an IVA are credit cards, payday loans, overdrafts, personal loans, and electric or gas arrears, however do get in contact with NDS who can talk through all the debts you have.
NationalDebtService.co.uk is an independent website created to help users find a solution to their debt problems. Our service is free to use and you are under no obligation to accept any of the recommendations you receive. An IVA (Individual Voluntary Arrangement) is subject to acceptance.
Debt write off applies to unsecured debts and on completion of an IVA. A debt write off amount of between 20% and 80% is realistic, however the debt write off amount for each customer differs depending upon their individual financial circumstances and is subject to the approval of their creditors.
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At National Debt Service, we do not give advice. On completion of our form, we will introduce you to one of our authorised IPA regulated companies. We use the contact details you have given us on the form to make this introduction. A debt advisor will contact you by telephone. During that telephone call, the debt advisor will discuss your options in more detail. During this call, and other subsequent communications, you will be dealing with a debt solutions partner and not National Debt Service. We may receive commission from the company we introduce you to.
Free money help and advice can be found at the MoneyAdviceService.org.uk