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How can we help? > Individual Voluntary Arrangements
(IVA)
Better budgeting, debt management or consolidation loans
can work for some people but in some situations can create
more problems. With a loan for example, you can end up owing
even more money.
There is a real alternative: the Individual Voluntary Arrangement
(IVA). This legally binding agreement protects you against
any further action from your creditors, letting you sort out
your problems. You can be realistically debt-free in five
years, subject to acceptance and conditions.
With an IVA, you agree with your creditors that you'll pay
what you can afford. That means a single payment each month
over a set period (usually five years).
Why choose an IVA?
An IVA is an alternative to bankruptcy for people suffering
from debt problems. It is a formal arrangement with your creditors
and has the following benefits:-
- Creditors must freeze all further interest or charges,
subject to acceptance and conditions
- Single monthly affordable payment
- Your home is protected from further actions by unsecured
creditors.
- Once the final payment is made, any outstanding debt
is legally written off by the Creditors
- Fixed repayment period (normally no more than 60 months)
with a specific end date giving light at the end of the
tunnel
- Creditors can not go back on the agreement once the arrangement
is accepted and demand increased payments
- Protection from court action by creditors
- The IVA is discreet and can be used by professionals,
forces personnel and the police without damaging career
prospects
What is an IVA?
An IVA or Individual Voluntary Arrangement is a formal legally
binding agreement with Creditors. It allows someone who is
in financial difficulty to make a formal proposal to settle
his/her debts within a reasonable and fixed period of time
- normally 5 years maximum. The terms of the IVA will depend
on your personal circumstances but can provide for you to
make affordable monthly
payments over a five year period or less, ultimately allowing
a proportion of your debt to be written off. It is also possible
to offer your creditors a lump sum to settle your debts through
an IVA.
Is an IVA right for me?
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download further information)
In order to assess if an IVA is right for you ask yourself
the following questions:
- Do you live in England, Wales or Northern Ireland?
- Are you struggling to repay your debts?
- Do you have unsecured debt in excess £20,000?
- Do you have a regular monthly income and can afford at
least £300 per month and/or a lump sum contribution.
If your answer to the above questions is YES, an IVA may
be the best option for you. To assist you in answering these
questions please complete the Money
Calculator.
WHAT IS THE PROCESS?
Initial Assessment
The first part of the process is to determine that an IVA
is the correct option for you and that you fully understand
what an IVA is and the implications of entering into an IVA.
We will ask you to complete a questionnaire that will enable
us to assess your financial situation and advice you in the
best possible way. This questionnaire can be completed online
or through the post.
Once we have reviewed your questionnaire we will try to arrange
a meeting that is convenient for you so that we can discuss
your situation. We believe that when discussing such important
issues it is best to do this face to face, if this is not
possible we will discuss your options over the phone.
The Proposal
Once we have decided that an IVA is the best option for you
and we are both happy that you fully understand the implications
of entering into an IVA we will begin to draft your proposal
which will be presented to your creditors, having first been
reviewed by you and that you are happy with the contents.
Approval of the IVA
Once your proposal is agreed by you we will send it to your
creditors requesting that they vote on the acceptance or rejection.
It is unlikely that any of your creditors will attend the
meeting as voting is normally dealt with by proxy which are
usually sent through the post or by fax. Your creditors may
wish to propose modifications to your proposal and these will
be discussed in detail with you at the meeting. Your proposal
cannot be changed without your agreement.
In order for your proposal to be approved you require over
75% in value of those creditors voting to accept your proposal.
Once your arrangement is approved, you need to ensure that
you keep to the terms of the arrangement. If during the term
of the arrangement, you find you can't meet your payments,
we can ask that you contact us as soon as possible so that
we may revert to creditors and request a reduction in payments.
What happens if my IVA is not approved?
We will only advise that you undertake an IVA if we believe
that it has a strong chance of being accepted. A possible
reason for rejection is that the dividend level proposed was
too low.
We will advise you before you commence with an IVA if we
believe that there is a strong chance that the IVA would not
be approved.
Can an IVA be concluded early?
Many IVA’s are concluded early with the introduction
of a lump sum contribution. These lump sum contributions need
not be greater than the total amount of monies paid into the
IVA should you complete the IVA in the usual way. Creditors
accept early settlements as they generally prefer to receive
their money earlier rather than wait for payments over a long
period.
What are the downsides of an IVA?
Once your IVA is approved you and your creditors are at a
duty to abide by the terms and conditions set out in the IVA
proposal. Failure on your part to adhere to the arrangement
could mean that the Supervisor has to fail the arrangement
and petition for your bankruptcy. At GB Debt Solutions we
will always try our best to vary or settle the arrangement,
rather than fail it.
Unlike in bankruptcy, an IVA is not advertised in the newspaper
although it is recorded by the DTI and can affect your credit
rating. However, if an IVA is successfully concluded, that
fact will be recorded on any report and may be more favourable
from the point of view of any future credit provider.
How much will an IVA cost me?
Unlike many other organisations, here at GB Debt Solutions
we do not request that you pay us any money for our services
upfront.
If your IVA is approved we simply take the costs for our
services from the money you pay into the arrangement, requesting
that your first payment is received at the creditors meeting,
Please call one of our professional debt advisers FREE
on 0800 019 9646 for free debt advice.
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