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    Individual Voluntary Arrangement (IVA)

    What is an IVA?

    An IVA (Individual Voluntary Arrangement) is a formal agreement made between the person in debt and their creditors. Once you enter into an IVA, your creditors can no longer take further action against you to recover any outstanding debts. All interest and charges associated with your debts are frozen. An IVA allows you to make affordable payments to your debts, usually over five or six years. At the end of your IVA, any outstanding balances included in your IVA will be written off.

    Advantages of an IVA

    With an IVA, no upfront fees will be charged. You will only make a single payment each month which is then distributed to creditors on your behalf. Once your IVA is approved, all of your creditors must agree to the IVA and this includes the terms and conditions that are attached to the IVA. By law, all interest and charges are frozen as long as you maintain your payments. With an IVA, you won’t be forced to sell your home because your home is a protected asset in an IVA.

    What debts are included in an IVA?

    Types of debts you can include in an IVA: credit cards, business cards, payday loans, business loans, car finance, court debts, utility bills, and catalogues.

    Who can get an IVA?

    An IVA is normally only suitable for those that are struggling to maintain payments to their current debts and have a regular income. In order to get an IVA, you must have spare income after you have met your essential living costs each month. Your insolvency practictioner will be able to offer you more specific advice once they know your circumstances. In order to meet the requirements for an IVA, you must reside in either England, Wales, or Northern Ireland. You will also need to: have £5,000 or more of unsecured debt, owe money to two or more creditors, and maintain a payment of atleast £70 per month. Please note that your creditors can choose not to accept your IVA.

    IVA Proces

    An IVA was introduced as part of the Insolvency Act 1986 to help debtors come to an arrangement to pay debts over a set period of time as an alternative to bankruptcy. To get an IVA, you must: complete a review and budget, prepare your proposal, and pay the IVA fee process.

    IVA Fees

    When you are choosing which insolvency practitioner to work with, be sure to choose an insolvency practitioner who does not charge upfront fees. We are one of the many companies that offer free debt service and choose not to charge you upfront for our service. With an IVA, you will need to pay a: nominee fee, supervisor fee, and disbursements.

    Money Support Group do not directly provide solutions, we receive a fee from these providers if customers agrees to enter an IVA. All our insolvency practitioners that we work with are authorised to act as insolvency practitioners in the UK, by the Insolvency practitioner’s association.

    IVA Information

    IVA Costs

    An IVA is not free. Legally, you cannot set up your own IVA. The insolvency practitioner who will set up your IVA, will charge you a fee. This fee is normally taken as regular instalments from the payments that you make towards your IVA. The fee is to cover the cost of the advice offered by the insolvency practitioner, the time spent putting together the legal aspects of the IVA and negotiating with your creditors, and also managing the IVA once it has been set up.

    Advantages of an IVA

    No upfront fee’s

    It’s affordable, You only pay back what you can afford and normally only an agreed percentage of your debts

    You make only a single payment each month which is distributed to creditors on your behalf.

    An IVA can resolve your situation in 5 years, on occasion it can take longer depending on any modification requested by your creditors

    Once your IVA is approved, All your creditors must agree to the IVA. Including the terms and conditions attached to an IVA

    By law, all interest and charges are frozen as long as you maintain your payments

    Your creditors will stop calling, Once enough of your creditors agree to an IVA at least 75% in value of the creditors will need to vote in favour

    You won’t be forced to sell your home, Your home is a protected asset in an IVA

    Disadvantages of an IVA

    IVAs are an expensive way to deal with problem debts. Beyond the insolvency practitioner’s fees, which can be very high, in order to complete your IVA you must make regular monthly payments for around five years. If your circumstances are likely to change or you don’t have a predictable source of income an IVA is probably not right for you.

    You may have to sell more expensive assets (like cars, valuable jewellery, or any property that isn’t your family home), and in some cases you may have to remortgage your home at the end of your IVA.

    Some other disadvantages of an IVA are that you will find it more difficult to get credit if you’ve had an IVA, which can affect things like catalogue shopping and obtaining a mortgage, as well as the more obvious things like getting a personal loan or credit card.

    Certain professions are also not allowed to practice if they have gone through an insolvency procedure, which includes IVAs. Common professions covered by these restrictions are accountancy and legal services, but you should check your contract of employment and with any professional bodies to find out if you may be affected.

     IVAs can be refused, Your creditors can refuse your IVA proposal but in most cases, we can negotiate with your creditors to get your IVA approved

      An IVA is a formal agreement, Therefore you need to make sure you comply with the terms and conditions attached to an IVA

      Your monthly repayments may leave you with a tight budget whilst your debts are repaid

     It will affect your credit score. IVAs remain on your credit file for 6 years from the day it starts, Some IVAs can last longer, therefore, this will show on your credit file for longer

     Not all debts can be included in an IVA, or example student loans, child support and maintenance, magistrate court fines and social fund loans are excluded from an IVA, but an allowance can be given to enable you to continue repaying these.

     If you fail to make the payments due under the terms of your IVA, then your arrangement could fail, in this instance, your creditors could attempt to make you bankrupt

     Your IVA will be listed on the Individual Insolvency Service register

    What happens to your house if you get an IVA?

    If you own your own home, you’ll most likely be asked to get a valuation on your house in the last year of your IVA. If remortgaging the house would raise more than £5000, you will be asked to remortgage it and any money raised will be put towards paying your debts. You will not have to sell your home. If remortgaging would extend the mortgage beyond its existing item, or put you beyond the state retirement age when it ends, you will not be expected to remortgage the property.

    If you can’t remortgage your house for any reason (refusal by the bank, or complications with a jointly owned property, for example), you will have to pay your usual monthly payments under the terms of the IVA for an additional year.

    It is possible but unlikely that you will be able to keep your home out of the IVA and thus avoid remortgaging it. If your insolvency practitioner feels that you will be able to pay back enough of your debts without including your house in your IVA, they may propose that it be excluded from the IVA when negotiating with your creditors, but this rarely happens.

    An IVA is a preferred option by many homeowners as your asset is protected whereas the alternative of bankruptcy you would in most cases be asked to sell your home.

    If you rent your home, nothing will happen as long as you keep paying your rent but we would always advise for you to check your tenancy agreement before entering any agreement.

    Which debts cannot be included in an IVA?

    Debts that cannot be included in an IVA are:

    • Existing mortgages
    • Secured debts
    • Active finance agreements
    • Fraudulent debts
    • Court fines
    • TV license
    • Student loans
    • Child support arrears

    How can I set up an IVA?

    If you want to get started on an IVA, contact us at 0800 088 2303. Alternatively, you can complete the online form so our team can confirm what options you have available.

    Will An IVA Affect My Mortgage

    If you own your home, you will almost certainly be asked to get a valuation on your house in the last year of your IVA. If remortgaging the house would raise more than £5,000, you will be asked to remortgage it and any money raised will be put towards paying back your debts. You will not have to sell your home. If remortgaging would extend the mortgage beyond its existing term, or put you beyond the state retirement age when it ends, you will not be expected to remortgage the property.If you can’t remortgage your house for any reason (refusal by the bank, or complications with a jointly owned property, for example), you will have to pay your usual monthly payments under the terms of the IVA for an additional year.It is possible but unlikely that you will be able to keep your home out of the IVA and thus avoid remortgaging it. If your insolvency practitioner feels that you will be able to pay back enough of your debts without including your house in your IVA, they may propose that it be excluded from the IVA when negotiating with your creditors, but this rarely happens.homeowners may need to release equity from the value of their homes to pay off debts, and that a re-mortgage may attract higher interest rates or, if no re-mortgage is available, an individual voluntary arrangement may be extended for 12 months

    What Is A Expenditure Form?

    When entering a IVA there are restrictions on the expenditure of a person who enters into an individual voluntary arrangement or a protected trust deed;These restrictions are there to make sure you are not overspending or underspending, this makes sure any discussion of payment is realistic and maintainable

    Can your IVA be rejected?

    An IVA is a voluntary arrangement.Therefore, before an IVA can begin, your creditors will be given an opportunity to vote as to whether they agree to the proposed IVA or not.The majority of your creditors must voluntarily accept your proposal before it can become legally binding on them all, so ensuring your creditors will be prepared to accept your IVA is essential if your application is going to be accepted.

    Creditors understand that a small proportion of their clients will fall on difficult times and therefore, be unable to keep up with their payments.

    When confronted with an IVA proposal, creditors are given a clear breakdown of the comparative returns that they could expect from both the proposed IVA and the potential return from the same applicant’s bankruptcy.

    And, whilst not always the case, the IVA will usually show a significant financial advantage to the creditor by demonstrating a greater financial return over a longer period when compared to the bankruptcy alternative.

    Because of this reason, the creditor is likely to agree to the IVA proposal.

    Unsecured Debts

    only unsecured debts included within the individual voluntary arrangement or protected trust deed may be discharged at the end of the period and unsecured debts not included remain outstanding

    Will an IVA affect my credit rating

    only unsecured debts included within the individual voluntary arrangement or protected trust deed may be discharged at the end of the period and unsecured debts not included remain outstanding

    Debts We Can Help With

    car-hire

    Car Hire

    utlity-debt

    Utility Bills

    payday-loan

    Payday Loans

    loan

    Loans

    hmrc-debt

    HMRC Debt

    overdraft

    Overdrafts

    council-tax

    Council Tax

    rent-arrears

    Rent Arrears

    credit-cards

    Credit Cards

    store-cards

    Store Cards

    phone-bills

    Phone Bills

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    Catalogue