IVA Info

IVA Info and Information Line on 0800 074 6918

If you are in debt, you should do the following things:
Make sure you are getting all the money that you are entitled to.
Work out what you spend your money on and cut back on your expenditure if possible.
Pay your most important debts (sometimes called priority debts) FIRST.
Contact ALL your creditors to explain your position and tell them how much you can afford to pay.
GET ADVICE if you are unsure what to do.

Contact The IVA Info Centre on 0800 074 6918

In the UK, Individual Voluntary Arrangements (IVAs) are a formal alternative for individuals wishing to avoid bankruptcy. The IVA was established by the Insolvency Act 1986 and constitutes a formal repayment proposal presented to a debtor's creditors via an Insolvency Practitioner. Usually (but not necessarily) the IVA compromises only the claims of unsecured creditors, leaving the rights of secured creditors largely unchanged.

An IVA is a contractual arrangement with creditors and can be as flexible as an individual's own circumstances; they can therefore be based on capital, income, third party payments or a combination of these.

Creditors take a decision at a creditors' meeting called to consider the IVA proposal. The return to creditors is often higher than they would receive in bankruptcy. A vote is taken - by value. More than 75% in value of those creditors who vote at the meeting by person or by proxy must agree in order for the arrangement to be approved. If any of those voting are 'associates' (usually business associates, friends and family) then a second count is taken and 50% of non-associated creditors must approve it.

IVA Information Guide

An IVA is a legally binding agreement between you and your creditors (people you owe money to). It helps those in financial difficulties to make a formal proposal to settle their debt.

Why use an Individual Voluntary Arrangement (IVA)?

A legally binding way to reduce the amount that you pay back
A way to stop any further interest charges
A way to reduce your monthly repayments
This means more money in your pocket at the end of the month

The IVA Process

An Individual Voluntary Arrangement (IVA) is a formal agreement between someone who owes money (the debtor) and the people he or she owes money to (creditors). An IVA proposal sets out how the debtor is going to repay the creditors, usually over a period of five years.

Due to its formal nature, an IVA has to be set up by a licensed insolvency practitioner such as one of our many approved and licensed practices. Unlike most other insolvency practitioners, our practices do not charge any upfront fees for putting together a client's proposals for an IVA.

The IVA Procedure

After your IVA case has been assessed, a plan letter will be sent to you. This explains the recommended course of action. You will be asked to sign and return a copy of this before we can proceed. Once it has your consent, we will then contact all your creditors to tell them that proposals for an IVA are being prepared and ask them to confirm the amounts you owe.

A IVA proposal is then drawn up. These will include your income and expenditure, creditor details, a short history of how the debts built up and a proposal for repayment (including the monthly repayment amount and the duration of the arrangement). You must read these thoroughly, ask questions if you do not understand anything and then sign them.

In some circumstances your IVA proposal may be sent to your local County Court for approval with a request for an Interim Order. The Interim Order will protect you from any further court action, including bankruptcy proceedings.

Your creditors will then be sent a copy of the proposals, schedules and all the other details along with the date, time and location of the Creditors Meeting. A representative will chair the Creditors Meeting. You will be expected to attend the meeting so that any points that arise may be clarified without further delay. For an IVA to be approved 75% (in value) of those who vote must agree. Once approved the IVA is legally binding on all creditors, even those who have not voted.

Throughout the duration of the IVA a supervisor will oversee the arrangement. You pay one monthly amount into an account held in your name. Annual reviews of your income and expenditure will be undertaken and an annual report sent to you and your creditors. Providing you stick to the terms of your IVA, at the end of the arrangement your debts will be cleared.

How to start an IVA?

The main point to note is that you must be prepared and have all the appropriate documentation to allow us to start your IVA.
An IVA is an alternative to bankruptcy. It is a contract between you and your creditors.
In order for your IVA to start the creditors must be very flexible, creditors will reasonably expect their prospects of recovering money to be at least as good as in a bankruptcy. They will also expect the IVA to contain the options available if the IVA does not get off to a good start.
To start the IVA the IVA team will help you with your proposal to creditors and, initially, he is known as your ‘nominee’. If the creditors accept your proposal, an insolvency practitioner then becomes the ‘supervisor’ of the IVA.
Your proposal will be voted on by your creditors at a creditors’ meeting. Generally, if over 75% by value of your creditors who are represented at the meeting (in person or by proxy) vote in favour, the IVA will be implemented.

Who can an IVA help?

An IVA can help anyone who is experiencing debt problems - particularly those who own property which they would risk losing if they were to be made bankrupt.
You owe money to people or companies that will not agree to an informal debt management arrangement.
You have already tried an informal arrangement, but it has failed.
You owe money to so many creditors that an informal debt management arrangement would be impractical
You are facing possible bankruptcy, or you have already been made bankrupt and you want to reverse the situation

The IVA Criteria

Debts greater than £15,000
3 or more creditors. This can not be three debts to the same bank such as Barclaycard visa, Barclay Loan and Barclay’s overdraft. The Criteria required to accept an IVA must be separate institutions.
Disposable income over £200 per month, assets to release or a 3rd party to contribute into the arrangement.
You must be able to pay creditors at least a 25 pence in the pound dividend. Many IVA cases fail because applicants can not afford to make a decent monthly payment.
You should have a regular income stream. Those who have some good months and some bad months will have to make sure they can make a regular payment. Some IVA cases fail because applicant’s income is irregular or unreliable.
Applicants must be able to show they have allowed for reasonable necessary living expenses such food, utilities, travel costs, council tax etc. Creditors are constantly criticising those who state too much or too little for food. Some IVA cases fail because applicants spend too much on car hire purchase payments.
The insolvency practitioner must make a positive 'Nominees Report' which portrays a professional opinion as to whether the Individual Voluntary Arrangement - IVA is a bonafide offer. He or she will decide whether the applicant is going be reliable and this perform the IVA successfully.

IVA Info in Scotland
In Scotland there is a similar procedure to the Individual Voluntary Arrangement called a Protected Trust Deed (PTD). The Trust Deed, although similar to the Individual Voluntary Arrangement in many ways, lasts only for 3 years as opposed to the normal 5 year period that constitutes the vast majority of IVAs. Trust Deeds are an alternative to bankruptcy in Scotland which is referred to as Sequestration.

Quick Debt Help Guide

Are You Getting All The Income You Are Entitled To
Write down all the income you (and your partner) receive. Housing Options can provide you with a form to help you with this. Listed on the form are some of the benefits which are available. You don't have to be unemployed to qualify for Welfare Benefits. Always check if you are in doubt. If you are working, check with the tax office to make sure you are not paying too much tax.

Are you overspending?
Write down what you spend your money on each week. The expenditure form will help you with this. There may be other things - put them in as well. Try to be as accurate and as honest as you can.

Budget to get out debt
Can you cut back on your spending? Look through the expenditure list you have made. Is there anything you can cut back on? Be realistic. Only cut out those things you can easily afford to do without.
Remember, these will be long-term cutbacks and not things you can start to spend on again in a few months' time.

Make a List of all Your Debts
Make a list of everybody you owe money to. This includes gas, electricity, rent, Council tax, water rates, mortgages, credit cards, store cards, loans, overdrafts, HP, fines, catalogues etc. Write down the account numbers, the amount owing, any arrears, the weekly or monthly payments and the interest rate.

Which are Priority debt?
Priority debts are those you should pay first. If you do not pay priority debts, the consequences are more serious than for other types of debt.

Some examples of Priority Debts are:

Mortgage or Rent
Council Tax
Water Rates
Gas and Electricity
Fines

Work Out How Much can You Afford?
Please make an appointment to see you Housing Options Officer. Bring the completed income and expenditure form with you. The Advisor will assist you to calculate the amount you have to pay towards your debts.

Pay Priority Debts First
You have already listed which are your priority debts. If there are arrears on any of these, contact the creditors and arrange to pay an amount you can comfortably afford.

Your Creditors are the people you owe money to
Once you have made arrangements for your priority debts, contact all your other creditors, even if it is only to tell them that you can't afford to pay. Send a copy of your income and expenditure to all your creditors, details of arrangements you have made with other creditors and details of them amount you are offering them (if anything). If interest is being charged on your debts you could also ask them to freeze this until the situation improves.

Get advice if you are in debt

If you are unsure about any of the above or you would like to discuss your problems please call 0800 074 6918 where you can receive detailed IVA info and get other debt management advice.

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IVA's

The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.

In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]

What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
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IVA Info

IVA Info and Information Line on 0800 074 6918

IVA Information Guide

The IVA Process

The IVA Procedure

How to start an IVA?

Quick Debt Help Guide

Get advice if you are in debt

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