Q & A Individual Voluntary Arrangement IVA

Who can apply for an IVA? 

Because of the costs involved it is only really viable for unsecured debts over £15,000

Will my house be safe? 

Yes it will be. But if you have any equity in your home this will be taken into consideration at some time during the arrangement (usually around the 4^th year)

If you have a partner with a share of the equity and they have no debts in the arrangement then that share of equity will not be touched.

In an IVA will my debts be frozen and my total debt reduced?

Yes, the IVA is an effective instrument that can be used to deal successfully with multiple debt problems, without the need to petition for your own bankruptcy.

Is an IVA a Government Approved Solution?

Yes, it is part of the 1986 Insolvency Act and as such is a legal statutory debt solution. At present the Government is also trying to make the IVA process simpler.

Where do I apply for an IVA?

Any of the sites on here, such as Debtfreeme, all offer expert guidance and advice on the way forward, or refer to the Insolvency Service.

Can my spouse and I start an IVA together?

Yes, many couples use a joint IVA to help with the relief of their debt burden. A joint IVA is no different to a single application, except both partners' debts are in the solution.

I am a professional person, will an IVA affect me?

Not necessarily. People from all walks of life are eligible to enter into an IVA with their creditors, without prejudicing their employment. ONLY A FEW professions would be excluded.

Do I have to go bankrupt and pay fees if my IVA fails?

You might not have to. If your IVA does fail you do not need to either petition for your own bankruptcy or will the IVA supervisor necessarily petition for your bankruptcy on behalf of the creditors.

What happens if I don’t keep up on my payments?

If you default on your payments, depending on the time scale involved and the reason, then your IVA supervisor will discuss the options available with you. He does have the right to file for your bankruptcy.

Can I enter into an IVA if I have received a statutory demand?

Yes, if the Court considers that an IVA is more appropriate.

What happens at the end of the IVA?

The Insolvency Practitioner (IP) will issue a “Statement Of Completion” usually about 3 Months after the final payment. The IP will also send a copy to the Insolvency Service so they can delete your name from the IVA register.

Is an IVA possible if I have CCJs (county court judgements) against me?

Yes, your advisor/IP will notify the Court of the circumstances so that their records can be updated.

Does an IVA cover all my debts?

It will deal with all unsecured debts.

Which creditors can I include in an IVA?

Unsecured debts from finance companies, credit cards, store cards, banks, VAT, some types of student loans, Inland Revenue and child/maintenance support arrears.

Can I cancel the IVA once it is setup and running?

No, it is a legal process and you cannot just cancel it if you change your mind.

Can a creditor take action before the IVA is approved?

Yes, but your advisor/IP if made aware of the recovery action would notify the appropriate court of your intention to do an IVA and apply for an Interim Order. This will stop any action until the outcome of the creditors meeting. 

Can I do an IVA if a Bankruptcy Order has been made against me?

Yes, if the Court and the creditors feel that an IVA is more suitable, then the bankruptcy order will be annulled, when the IVA is agreed.

Does being a homeowner make any difference?

No, A tenant or homeowner, or even people living with parents or partner can apply.

Do I have to tell my partner that I am doing an IVA?

No, but we would normally advise that you do.

What is the difference between a Secured debt and an Unsecured debt?

A Secured debt is a debt secured against an asset you own (normally your property).
An unsecured debt is anything not secured on an asset, such as an overdraft, store card, credit card etc.

Can an individual creditor refuse to accept an IVA?

Yes, but it will only have an effect if that creditor has more than 25% of the value of those creditors. In other words if he is owed more than a quarter of the total debts being dealt with. If they do not, then they become bound by the arrangement of the majority vote.

Do the creditors have to accept my IVA?

No, this decision is decided at the creditors' meeting. As long as 75% of the creditors accept the proposal it is binding by all other creditors.

Can I still operate my business?

There are no restrictions on your business, unlike Bankruptcy.

Will my IVA become public knowledge?

No, it is confidential and only your creditors will be aware of your situation.
The Department Of Trade and Industry have a register which is available to view on their website.

How long does an IVA last? 

An Individual Voluntary Arrangement normally lasts about 5 years, but this time can be shorter depending on each individual's circumstances.

What happens if my IVA is not approved?

Ideally, whichever advisor/IP you use should be able to offer a solution if this happens.

Once the IVA is in place will this protect me from my creditors?

Yes, you are protected from further recovery action from your unsecured creditors.

What if my situation changes?

If you are struggling to make the payments agreed because of a change in your situation, your supervisor in the IVA can apply to your creditors and request a variation to reflect your new position.

How do companies make money from me who say they do the IVA for free?

They will tend to earn their money by acting as the Nominee & Supervisor, in layman terms acting as “good cop/bad cop”.

What documents do I need?

Mortgage statement, Property Valuation, Endownment policy surrender value, copy of car HP agreement, wage slips, and creditor statements. Also a detailed account of circumstances leading up to your problem.