Bankruptcy Or IVA
What Is IVA
Mortgage With IVA
Cost Of IVA
Do I Qualify For An IVA
Information On IVA
IVA Debt Advice
IVA Form
IVA Guidelines
Individual Voluntary Arrangements
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UK IVA Providers
About Individual Voluntary Arrangements
This website is here to help you understand what an IVA is and to point you in the direction of some of the best specialist providers if you need advice on whether to set one up. An IVA is short for individual voluntary arrangement and this is something that was set up by the UK government and is available only to people in the United Kingdom. The nearest equivalent for US citizens would be debt settlement.
Individual voluntary arrangements are available in England, Wales and Northern Ireland. If you live in Scotland, you can get the equivalent debt solution which is called a Trust Deed. All the recommended debt companies on this page can provide both IVAs and Trust Deeds, so the contacts are suitable for all UK residents.
How Does An IVA Work?
Individual voluntary arrangements were created to provide an alternative to bankruptcy for UK businesses. The way they are used now is to deal with consumer debt problems that would otherwise lead to filing for bankruptcy. They are therefore designed to address very serious debt problems. They are legal and binding agreements that you sign up to with your creditors. Under the arrangement you agree to pay a certain amount each month towards your debts. This is based on what you can afford out of your available income.
The IVA lasts for a set period of time, usually five years, after which any debts that have not been fully repaid are written off. Depending on your circumstances you can end up writing off a significant portion of your debts. It usually means getting rid of about half of your debts, though it can be as high as 75% of them.
In terms of actually setting up the IVA, there are certain advantages to it being a formal and legally binding agreement. If you can get the creditors representing at least 75% of your debt to agree to setting it up, any remaining reluctant creditors have no option but to join in too. This means you can ensure that all your debts are included in the scheme even if some creditors are not willing.
Who Is An IVA Suitable For?
You will not be offered an IVA unless it can be shown that you cannot afford to pay back your debts in full. The most common form of debt solution is a debt management plan, which is a way of restructuring your debts to make it more affordable to pay them off. The big differences between this and an IVA are that you are repaying your debt in full rather than writing some of them off, and the agreement is an informal arrangement that is much easier to get out of than an individual voluntary arrangement.
For an IVA to be viable you must be a UK resident with unsecured debts of at least £15,000. Debts which are unsecured are those which are not tied into some asset. A mortgage for example is a secured debt so cannot be included in an IVA. Your finances should be such that you do not have enough spare income to keep up with all the payments due on your debts, but you must have sufficient income to be able to make a reasonable monthly payment into the IVA.
You need the majority of your creditors to vote in favour of the agreement for it to be set up. This means they are voting for only being paid a proportion of what is actually owed to them. They are not going to do that if it is obvious that you could actually repay them in full. The IVA will only work if it can be shown that the only alternative would be bankruptcy, and if that happened they could receive less or even nothing.
Even if you are not eligible for an IVA, all of the companies recommended below can also provide debt management plans to reduce and simplify your outgoings.
Main Advantages of An IVA
What attracts most people to the idea of an individual voluntary arrangement is that it provides a way to write off a large part of your debts that you could otherwise not manage to repay. In doing this you are able to avoid being declared bankrupt and all the stigma and consequences that are associated with that option. When you become bankrupt it has to be advertised in the press, whereas an IVA does not and can be kept private.
Another major advantage over bankruptcy is that you are far less likely to have to sell your home. When you become bankrupt you immediately lose all control over your assets, including your home. You have more say with an IVA over what is included in the arrangement.
In terms of your daily life after you set up an IVA, there are obvious improvements such as not being chased by creditors and having a much simpler system for paying your debts. Instead of having to keep track on lots of separate bills and payments, you just make one monthly payment to your IVA provider. They then have the dubious pleasure of dealing with your creditors, who are no longer allowed to contact you about the money you owe. Creditors are also prevented from taking any sort of legal action against you.
There are certain other practical advantages over bankruptcy, such as no restrictions on your business activities or holding certain roles or offices. If you have your own business you will be able to carry on running it, whereas with bankruptcy you would almost certainly have to close and lay staff off.
Compared to a debt management plan you have more control over getting creditors to join in and remain part of the arrangement. With debt plans there is nothing you can do to make people join and if they change their minds you cannot stop them. Creditors are legally bound by an IVA, but you should remember that you are too.
Recommended IVA Specialists (UK)
It is advisable to apply to more than one company before making a decision.
Top Recommendation: 123DebtSolutions
123DebtSolutions provide IVAs and trust deeds, but because they deal with many different debt companies, they can offer debt solutions for a wide range of circumstances. You can therefore get debt management plans and debt consolidation loans through the company.
You should be a UK resident over 18 years of age and preferably have at least £3,000 worth of debt to a few different creditors. To get debt help from 123DebtSolutions just complete the Online Form on this page.
IVA Specialist: Money Advice Group
This very well established organisation provide a wide range of financial solutions including IVAs and trust deeds. You can also get debt management plans and consolidation loans. To see if they can help you, just visit their website and fill out the Free Online Debt Test on the right of the page. You should be aged at least 18 and have debts of £5,000 or more.
Articles Of Interest:
Christian Debt Management Services
See If You Are Eligible For An IVA Now By Completing The Form Below
A debt advisor will contact you to go through your situation to see if an IVA would be right for you
Your home may be repossessed if you do not keep up repayments on a mortgage, loan or any other debt secured on it. Think carefully before securing other debts against your home.