Paso Robles News|Saturday, December 4, 2021
You are here: Home » Uncategorized » What is an IVA?
  • Follow Us!

What is an IVA? 

Do you need advice on how to deal with your debt?

Let’s look at the IVA meaning – an Individual Voluntary Arrangement (IVA) is a formal and legally binding agreement between you and your creditors to pay back your debts over a period of time. This means it’s approved by the court and your creditors have to stick to it.

An Individual Voluntary Arrangement can be flexible to suit your needs but it can be expensive and there are risks to consider.

How an IVA works

An Individual Voluntary Arrangement (IVA) freezes your debts and allows you to pay them back over a set period. Any money you still owe after this period is then written off.

You can apply for an IVA if you can afford to pay something towards your debts but not necessarily the full amount your creditors want. Typically, this is around £70 a month after you’ve taken care of essential costs, but will vary between IVA providers.

You’ll need to show you have a regular long-term income, as the repayments will usually cover a period over 60 or 72 months (five to six years).

If you have a lump sum to pay towards your debts, you might also qualify for an IVA.

if you’re a homeowner, in the second to last year of the IVA, you might be asked to re-mortgage your house and use the extra funds towards repayment. If you do this, the IVA term would then finish a year early or after you’ve re-mortgaged.

The IVA is set up by a qualified professional called an Insolvency Practitioner. They’ll work with you to put together a proposal to take to your creditors for approval.

It very much depends on what your circumstances are as to whether your creditors will agree to the plan. But if at least 75% of your creditors agree to the proposal, an IVA is likely to be approved – even if some creditors disagree.

An IVA is a legally binding agreement between you and the people you owe money to. This means when you’ve signed it, it can be difficult for you or your creditors to back out. And if you do back out, there are likely to be hefty penalties.

How to set up an IVA

You have to set up an Individual Voluntary Arrangement through an insolvency practitioner.

There might also be up-front charges to pay before your IVA has been set up. These can differ a lot between IVA providers. You’ll also have to make monthly payments to oversee the IVA.

There are also fees to pay to the insolvency practitioner, which are usually taken from your monthly payments.

It’s always best to get advice from a free debt advice service. They should also be able to recommend an IVA provider for you and help you understand the different fees and charges if you want to choose one yourself.

Do I qualify for an IVA?

You will need to meet the following criteria in order to be eligible to apply for an IVA through PayPlan:

  • Have a minimum debt level of £7,000
  • Owe money to at least 2 creditors
  • Have a regular income either from employment, benefits or pension
  • You can afford to pay a minimum of £50 into the arrangement after all of your essential living costs have been met

Before we recommend an IVA for you, we will carry out a full assessment of your circumstances to decide if this is the best debt solution for you, or recommend an alternative, if we think that would be better.

What debts can be included in an IVA?

Most common types of debt can be included in an IVA, such as credit cards, personal loans, overdrafts, utility arrears, store cards, catalogues and payday loans. But secured debts (like mortgages or other loans secured against your property) and some other debts (including student loans, fines and child support) will still have to be paid separately, outside of the IVA. Contact an insolvency practitioner to find out which of your debts it can cover.

What debts does an IVA usually cover?

When you enter into an IVA, most of your debts will usually be included:

  • Catalogues
  • Credit cards
  • Personal loans
  • Overdrafts
  • Gas and electric arrears
  • Council tax arrears
  • Water arrears
  • Payday loans
  • Store cards
  • Income tax and national insurance arrears
  • Tax credit or benefit overpayments
  • Debts to family and friends
  • Any other outstanding bills, for example, solicitor’s costs, invoices for building work and veterinary bills

Your insolvency practitioner, who administers IVAs, will confirm which debts will be included.

Debts that aren’t usually included in an IVA include:

  • Mortgages and secured loans
  • Hire purchase agreements
  • Court fines
  • TV Licence arrears
  • Student loans
  • Child support arrears

 

Get free advice about setting up an IVA

It’s always best to talk things through with an experienced debt adviser and insolvency practitioner before you decide to take out an IVA.

This is because the debt solution that’s best for you depends on your personal circumstances and might not be this one.

Debt advisers can help you make the right decisions so most of your money will go to paying off your debts. This means you could be debt-free sooner than you thought.

A debt adviser will:

  • treat everything you say in confidence
  • never judge you or make you feel bad about your situation
  • suggest ways of dealing with debts that you might not know about
  • check you have applied for all the benefits and entitlements available to you
  • always make sure you are comfortable with your decision.
  • Provide a money advice service to avoid bankruptcy

 

Three-quarters of people who get debt advice feel more in control of their finances afterwards. You can find free, high-quality debt advice and debt solutions at IVA Advice. We can also look at ways of improving your credit rating over time and create a good debt management plan.

Contact IVA Advice

If you’re looking for advice on securing an IVA, we can help you today. Our friendly team will discuss your options and look at potential repayment plans that offer convenience and security.

We’re authorised and regulated by the Financial Conduct Authority and we are a company registered in England. Our service guarantees you’ll get the best solutions for your situation, and all you have to do is tell us your details, and we can use our IVA calculator to work out the right repayment plan.

Please feel free to contact us at our registered office, or you can use our website to fill in your details, and we’ll get back to you ASAP. Our IVA proposal will aim to help your financial situation.

Remember, debt doesn’t have to be a black cloud over your head and working with us means you have an opportunity to remove past mistakes from your credit file. Contact us for a debt solution and debt advice today. We look forward to hearing from you.

 

Advertisement
About the author: Access Publishing

Scott Brennan is the publisher of this newspaper and founder of Access Publishing. Connect with him on Paso Robles Daily News on Google, Twitter, LinkedIn, or follow his blog.