First introduced as part of the government's Insolvency Act of 1986, IVAs are designed to provide a more attractive alternative for people who would otherwise have no choice but to become bankrupt. Since then they have become one of the most widely used ways in which people solve their debt problems. In 2012 alone over 50,000 people entered into an IVA and took the first steps to becoming debt free.
Quick Tip - To discover whether an IVA might be the right option for you try our Debt Solution Finder on the right hand side of this page or for immediate advice call us today on 0800 028 4422.
How can an IVA help you to clear your debts?
With an Individual Voluntary Arrangement you can -
How do Individual Voluntary Arrangements work?
Most IVAs are arranged on the basis that you will make regular monthly repayments for a fixed period of time. Typically these payments will be made for five years. However in limited cases the IVA may instead involve making a one off lump sum payment to your creditors. This will usually mean raising a lump sum from your assets such as equity in your home. In all cases we will carry out an assessment of your finances and recommend what will be the best option for you.
Will I be able to write off all my debts?
No, an IVA can't be used to write off all of your debts. However in our experience it is possible to write off up to 80% of what you owe. The exact amount that is written off will vary from case to case depending on your circumstances and the agreement of your creditors.
How do I arrange an IVA?
Only licensed Insolvency Practitioners are able to set up and manage IVAs. If you are in debt and feel that an IVA might be the solution you're looking for then the first step is to speak to one of our advisors. Should an IVA be the best option for you we will prepare your case and appoint one of our Insolvency Practitioners to act on your behalf.
You can also find out more in our guide to applying for an IVA.
How long does it take to set up an IVA?
Usually an IVA can be set up in six to eight weeks. Our Insolvency Practitioner will draft a proposal to your creditors and convenes a Creditors Meeting. At this meeting the Insolvency Practitioner will negotiate on your behalf with your creditors, who will vote on whether to accept or reject the IVA proposal.
Often creditors send their vote and don't actually attend the meeting, but it is vital that all your creditors are contacted. If they have no notice of the meeting they do not have to be bound by the terms of the IVA and can pursue you for their debt separately.
What happens at the Creditors Meeting?
Your creditors will vote on whether to accept or reject your IVA proposal. For the arrangement to go ahead you need the agreement of at least 75% of your creditors. If 75% of your creditors 'by value' agree to the IVA, then the rest are bound to accept, even if they voted against it or even did not vote at all. 'By Value' means the creditors to whom you owe 75% worth of debt, not the number of creditors you have.
If my proposal is accepted, what happens next?
Once the IVA is agreed our Insolvency Practitioner will supervise the arrangement and make sure things run smoothly. However we will also take an interest in the case and will keep you up to date at all times on the progress of your IVA. An IVA can help you avoid having to declare bankruptcy, but you need to keep making the payments that have been agreed. It is therefore very important that we know the true extent on your debts - we need you to be completely honest with us about your financial circumstances, that way we can do our best for you and get the right settlement for you.
Spencer Hayes provides a professional debt advice service. All of our counsellors are fully qualified and follow Law Society and FSA guidelines to give the best advice at all times. As licensed insolvency practitioners we are authorised to set up and manage IVAs from start to finish.
To find out if you more about Individual Voluntary Arrangements call our debt helpline on 0800 028 4422. Alternatively complete the enquiry form to request a call back from one of our advisors.