IVA FAQ's
What is an IVA?
Will an IVA cover all my debts?
How long does it take to arrange an IVA?
I am a homeowner, will an IVA affect this?
Will an IVA affect my business?
Do all creditors have to agree?
What happens if my IVA is not approved?
What happens if I cannot make the repayments?
What if my circumstances change?
Will an IVA affect my credit rating?
What happens at the end of the IVA process?
What is an IVA?
An IVA (Individual Voluntary Arrangement) can help people with unsecured debts of over £15,000. It is a legally binding agreement between a debtor and creditors. The IVA process is overseen by an Insolvency practitioner. IVA's were introduced by the government as part of the Insolvency Act 1986 as an alternative to bankruptcy. An affordable payment is agreed for a fixed period of time which is usually 5 years. At the end of the agreed period any outstanding debt is written off and you walk away debt free.
Will an IVA cover all my debts?
An IVA will only cover any unsecured debts and arrears.
How long does it take to arrange an IVA?
To arrange an IVA takes usually between 6-8 weeks.
I am a homeowner, will an IVA affect this?
If you have equity in your house you may be asked to release part of this to pay towards the agreement. Unlike bankruptcy your home will not be repossessed with an IVA.
Will an IVA affect my business?
With an IVA there is no limit on your business activities.
Do all creditors have to agree?
For an IVA to be approved at least 75% of your creditors must vote in favour of the arrangement. This is done at a creditor meeting which would be set by your Insolvency Practioner.
What happens if my IVA is not approved?
In this case you’re Insolvency Practioner or Debt Advisor would offer alternative solutions to help you get out of debt. i.e. through a Debt Management Plan or Consolidation Loan.
What happens if I cannot make the repayments?
If you are struggling to make payments then we would try and renegotiate the terms of the agreement with your creditors to try and get you a more affordable payment.
What if my circumstances change?
If your circumstances change for the good or the bad then your Insolvency Practioner (IP) can request a variation to your agreement to reflect your new circumstances accordingly.
Will an IVA affect my credit rating?
You credit rating will be effected during the duration of the arrangement. Once the period is ended your credit rating will start to improve.
What happens at the end of the IVA process?
If you make all your repayments on time, in full and stick to the agreement, any outstanding debt will be written off at the end of the term. (Usually 60 months for an IVA).
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