IVA - a real alternative to bankruptcy
- Get expert help and advice with your IVA
- Freeze interest and charges (once IVA is in place)
- Have one agreed monthly payment tailored to you
- Prevent or stop legal action - including bankruptcy
A practical solution to unmanageable debt
An IVA (Individual Voluntary Arrangement) could be the solution to your unsecured debt problems you thought you'd never escape from without declaring yourself bankrupt.
If you can't keep up with your monthly debt payments, an IVA could:
- Reduce your monthly payments. Down to a level you can manage.
- Reduce the total amount you have to pay. Leaving you with no further liability towards your unsecured creditors upon successful completion of your IVA.
- Reduce the time you'll spend repaying your unsecured debts. Giving you a date in the future when you know they will be repaid.
An IVA is a legally binding agreement between you and your lenders. With them accepting the IVA, and you sticking to the terms, they're agreeing to accept tailored monthly payments, not to pursue any legal action against you (including trying to make you bankrupt), and to write off any outstanding unsecured debt at the end of the IVA. You agree to pay as much as you can afford for the time agreed.
Calls may be recorded for training and monitoring purposes. Subject to eligibility and acceptance.
A light at the end of the tunnel
Perhaps the most important thing an IVA delivers is peace of mind, providing concrete answers to the questions you're probably asking yourself every day:
- Will I be able to afford my monthly payments?
Yes - your monthly payments will be based on what you can realistically afford after paying for your essential expenses (such as your mortgage or rent).
- Will I lose my home?
Unlike bankruptcy, in an IVA you are highly unlikely to be forced to sell your home.
- Will my lenders take me to court or try to make me bankrupt?
No. As long as you stick to the terms of the IVA, they won't be able to.
- Will I ever repay my debts?
Yes - with an IVA, you should know exactly when your unsecured debts will be repaid.
IVA Key information and FAQs
- What is an IVA?
Using legislation that is designed to help you repay your unsecured debt, an Individual Voluntary Arrangement is a formal agreement between you and your creditors which stops creditor demands. It enables you to repay your unsecured debts in single, tailored monthly payments over a fixed period (usually 60 months), as long as you stick to the terms.
- How can an IVA help me?
Once set up and if you continue to pay the agreed amount each month you'll be protected from any further action being taken against you by your creditors.
If you stick to the agreement for the full term, your creditors agree to write off any unpaid unsecured debts upon successful completion of your IVA.
- How does the process work?
Talk to us, explain your situation, and we'll assess whether or not an IVA could be the right solution for you. If it is, we'll work with you to draw up an IVA Proposal - a formal offer showing your lenders what you would be able to pay.
Assuming this Proposal is approved, you'll simply start making your monthly payments (which will be based on your available income after you've paid all your regular expenses). As long as you fulfil your side of the agreement, any outstanding unsecured debt that was included will be written off at the end of the IVA.
- Will an IVA protect my house?
One of the key benefits of taking out an IVA over bankruptcy is that an IVA will not require the individual's home to be repossessed. However, if you own your own home it is likely that you will have to release some of the equity in your property towards the total dividend in the last year of the IVA.
- Will my credit rating be affected?
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Entering a debt solution will affect your credit rating in the short term and might affect it in the medium-to-long term. In the case of an IVA or Trust Deed, your credit rating will be affected for 6 years.
- What will happen if I cannot meet my payments?
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Debt Reducers will agree a repayment plan that best suits your needs. This should ensure you can meet your payments for the duration of the IVA, as not meeting your agreed payments can result in the IVA failing, putting you in a worse position, and even leading to bankruptcy. If your circumstances do change and you find that you are unable to meet your payments, we will try to renegotiate the terms of the agreement with your creditors.
- Do all of my creditors have to agree to an IVA?
To approve your IVA, at least 75 per cent (by debt value) of the creditors who vote at a meeting, must accept your proposals. Even if they don't vote, or they vote against your proposals, each of your creditors will be bound by the agreement as long as it has been accepted by this majority.
- Why would my creditors accept an IVA?
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In accepting an IVA, your creditors will expect to get a better return than they would from any other reasonable alternative, and your payment proposals should demonstrate this to be the case. Your creditors will also benefit from the fact that your performance with the terms of your IVA will be monitored by a professional.
- What will an IVA cost?
The costs of your Insolvency Practitioner to deal with your IVA are included in the payments you make. At Debt Reducers, we are committed to being totally clear, open and fair to both you and your creditors about our fees and any other costs that may be incurred.
Click here to read more about IVA fees.
- What is the difference between an IVA and bankruptcy?
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IVA
- Duration: 5 years, in most cases
- Effect on home: Very unlikely to force sale of home; will probably require release of some equity
- Effect on career: Some companies may not employ an individual with an IVA
- Publicity: Not advertised in newspapers, but will appear in the Individual Insolvency Register (which is publicly available)
Bankruptcy
- Duration: Normally 1 year (payments can last for 3 years; in exceptional cases, a Bankruptcy Restriction Order may be granted, which can last 15 years)
- Effect on home: Very likely to force sale of home
- Effect on career: Bankrupt individuals cannot hold certain positions: e.g. company director, local government councillor or justice of the peace
- Publicity: Bankruptcy will be advertised in newspapers.
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Expert advice from Debt Reducers
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Key information & fees
For more information on the fees involved with each debt solution, please click here.