Individual Voluntary Arrangement (IVA)
If you’re struggling with personal debts and are worried about not being able to make your payments, then an IVA may be the best option for you. They offer a formal solution to your debt problems, which is a legally binding contract between you and your creditors. With an IVA, your debt is frozen and an agreed, affordable monthly payment is made to your creditors.
Learn more about an individual voluntary arrangement and how the team at Restart BTi can provide expert IVA advice to keep your personal finances in order. For free, tailored IVA advice in confidence, get in touch with us today.
What do Individual Voluntary Arrangements do?
An IVA is a contract between you and your creditors to get your debt paid off (either in full or in part) in affordable monthly instalments. It freezes your interest, allowing you to pay off what you owe without the worry of more debt building up. These debt repayment contracts are usually set out for 60 or 72 months (five to six years).
For your Individual Voluntary Arrangement application to be successful, you will need the assistance of a licensed Insolvency Practitioner and the agreement of 75% of your creditors. This means that even if some creditors do not agree, it’s the majority vote that counts.
Is an IVA the right option for me?
It’s important that you seek the expert opinion and advice of a trusted Insolvency Practitioner before you apply for an IVA. To learn more about whether this option is the right path for you, please get in touch with one of our licensed practitioners today for confidential advice on IVA.
What are the benefits of an IVA?
- Affordable monthly payments to pay off your debt over a set number of years
- The option for additional lump-sum payments to pay off your debt quicker
- Once your payment plan is complete, your debt is written off
What are the risks of an IVA?
- Your credit rating will be negatively impacted
- An IVA is recorded on a public register
- Your spending may be restricted when your IVA comes to an end
- You may need to remortgage at a higher rate to release equity in your home
- In some instances, creditors may not agree to the terms of your IVA and reject the proposal
How does an IVA work?
When an individual is insolvent but has the means or desire to maximise the return to creditors it may be appropriate for them to seek the agreement of creditors to an Individual Voluntary Arrangement, as an alternative to Bankruptcy.
This is a legally binding agreement that enables repayment of the individual’s liabilities, in full or in part. The Proposal for an Individual Voluntary Arrangement can take any form, it is usually by way of contributions from future income but can include a sale of assets, third party funds or any combination.
To be eligible, you will need to have regular taxable income with proof of long-term sustainability. For example, proof that you have completed your probationary period or evidence to show that you have a permanent job contract.
Creditors consider the Proposal for an Individual Voluntary Arrangement at a decision procedure. In order for it to be approved, 75% of voting creditors need to approve it. If the majority is reached, those voting against it would be bound by the terms of the Proposal.
As long as the individual adheres to the terms of the Proposal, the Individual Voluntary Arrangement will be concluded successfully, and the remaining debts will be written off. An individual can retain control of his assets during this process. For more IVA debt advice, contact us using our contact form.
Can an IVA affect your home and belongings?
Before you consider the route of an IVA, it’s important to understand the ways in which it can affect your home and belongings. For example, if you own your home and there’s equity in the property, you may be required to remortgage to release some of that equity in order to make a lump-sum payment towards your creditors.
Other ‘items’ of value that may hold assets include land or your car. While it’s unlikely that you will be required to sell your car as a part of your IVA, it can sometimes be included if required. As a general rule, your car is not affected by an IVA if you rely on it for essential transportation, such as for the school-run, or to commute to work. When you work with Restart BTi, your Insolvency Practitioner will be able to provide you with all the information and IVA debt advice you need requiring your unique individual circumstances.
One of the most common questions we are asked is whether your belongings will be affected by an IVA. In other words, will you be forced/required to sell any items of value in order to pay off your debts? The answer is no. You will not be required to sell any of your valuable belongings in order to pay your debts. This is a personal choice, and will not be a part of your agreement.
What debts can you pay off with an IVA?
With an Individual Voluntary Arrangement, you can pay off any:
- Personal loans
- Credit cards
- Store cards
- Catalogue debts
- Overdrafts
- HMRC debt
- Mortgage shortfalls
- Hire purchase debt
Receive free, confidential IVA advice with Restart BTi
If you’re struggling with paying off your debts and want an effective solution to get your finances back on track, then talk to one of our experienced team members today. With full confidentiality, you’ll be provided with tailored advice that enables you to learn more about your debts and what solutions are available to you.
With debts, you’re not alone. We’re here to help you get your stability back. Contact us today using this short enquiry form below, and we’ll be in contact with you. If you have a preferred date/time you’d like us to talk to you on, please add a note in the box provided.
IVA Advice FAQs
Yes, an Individual Voluntary Arrangement will negatively impact your credit rating. Your IVA will appear on your credit score for 6 years, meaning that you may face difficulty applying for any form of credit, including a mortgage, during this time.
Typically, an IVA takes around 6 to 7 years to fully complete. To ensure that the process doesn’t last any longer than it has to, speak to our team for expert debt and IVA advice.
If you’re still able to make your monthly payments, then it is unlikely that you will be required to sell your home if you take out an IVA to fix your debt issues. However, you may be required to remortgage to release assets on your home to pay off some of your debts.
Yes. If you hold a savings account with available funds, this could be used in accordance with your IVA to pay off some of the outstanding debts to your creditors.
The answer depends on your employment. For example, if you are a solicitor or financial advisor, then it is likely that your job will be affected by an IVA. It’s important to check your employment contract to be fully aware of the terms and conditions of your employment.
Yes. You can still save up to afford a holiday if you have an IVA. However, it’s important to ensure that you pay off all your monthly payments in accordance with your IVA agreement. So, if you’re planning to go on holiday, budgeting is essential.
FAQs
An IVA must be set up by an approved insolvency practitioner like Restart BTI, and agreed by 75% of your creditors. Once you have sourced an insolvency practitioner, they will usually apply to the court for an interim order which stops creditors from starting bankruptcy proceedings against you. Your debts and interest will then be frozen, and an affordable repayment plan will be drawn up.
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Restart BTi
Suite 44 Dunston House
Dunston Road
Chesterfield
Derbyshire
S41 9QD
- 01246 959 388
- Fax: 03333 444 993
- Email: enquiries@restartbti.co.uk
Restart BTi is the trading name of Restart Business Turnaround Insolvency Limited, a limited company registered in England and Wales no: 11517419
Registered Office: Suite 42 Dunston House, Dunston Road, Chesterfield S41 9QD
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