Individual Voluntary Agreement

• What is an IVA?
• How do I enter into an IVA?
• What does it cost?
• Are you dealing with all of my debt?
• Will an IVA affect my home?
• Can I stop my IVA at any time?
• What happens if I stop paying?
• What if my circumstances change?
• Will my credit rating be affected?
• If my IVA is not approved, what happens?
• Is there anything to be aware of?

What is an IVA?
An IVA (Individual Voluntary Arrangement) is a legally binding structured repayment plan, which benefits both you and your creditors. It was introduced by the government as part of the Insolvency Act 1986 and will be carried out by a licensed Insolvency Practitioner. A creditors meeting will be called to allow creditors to consider your proposal. Generally, if at least 75% by value of your creditors who are represented at the meeting vote in favour, the IVA will be implemented. Creditors may put forward changes to the proposal, but they cannot impose them on you – you can decide whether or not to accept them. You are not legally required to attend the creditors’ meeting but you can if you wish. Once accepted there will be just one affordable amount payable over an agreed term, usually 5 years. All the interest and charges on your accounts will be frozen.

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How do I enter into an IVA?
You will need to speak with a No Debt Now advisor who will evaluate your income and expenditure to see if you qualify for an IVA. If it is decided that an IVA is the best option for your circumstances, our Insolvency Practitioners will call you to discuss your IVA in more detail and also arrange for the necessary paperwork to be sent to you. Once they have received your completed paperwork they will contact your creditors and deal with them on your behalf for the duration of the arrangement.

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What does it cost?
Your Insolvency Practitioner will agree their fees with your creditors. These fees are deducted from the contributions made by you to your IVA. A full breakdown of fees will be provided by your Insolvency Practitioner.

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Are you dealing with all of my debt?
You can only include unsecured debts and arrears on an IVA. If you are having problems with priority debts such as Mortgage, Rent, Hire Purchase agreements or utility bills then you should contact these direct as failure to pay your priority debts may put you at risk of losing your home.

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Will an IVA affect my home?
You may have to release equity in your home as a contribution towards your debts. This will usually happen in the fourth year of your IVA. Your Insolvency Practitioner will discuss this in more detail with you.

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Can I stop my IVA at any time?
No. Your IVA is a legally binding agreement between yourself and your creditors and cannot just be stopped.

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What happens if I stop paying?
If you do not make payments to your IVA you may be made bankrupt. You should take care not to agree to anything that is not realistic and achievable.

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What if my circumstances change?
If you have a genuine change in circumstances your Insolvency Practitioner can request a variation.

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Will my credit rating be affected?
If it hasn’t already it most certainly will be once you are on an IVA. Unpaid debts will affect your creditworthiness, however if an IVA is successfully concluded, that fact will be recorded on any status report and may be more favourable from the point of view of any future credit provider.

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If my IVA is not approved, what happens?
An alternative arrangement to pay your debts will have to be made. Your advisor at No Debt Now will be able to discuss these options with you.

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Is there anything to be aware of?
An IVA gives you an opportunity to avoid bankruptcy. If it is not approved, a creditor may bankrupt you. This will be a last resort as other options may be available to you. You should make the best offer you can to your creditors. When dealing with your Insolvency Practitioner and your creditors, you should be completely open and honest and must disclose your complete financial circumstances.

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