FAQs
Does an IVA guarantee freedom of debt in five years?
Most IVA’s last for five years, but in some cases, they can run for six years. Once an IVA has been completed, any balance of the debt is written off.
How long does it take to set up my IVA?
From the initial advice, if all paperwork has been provided that is required to draft the paperwork for an IVA, and if all documents are signed once completed, the process can take a maximum one month. This includes getting creditors approval of the IVA.
What is an IVA?
An IVA is an alternative to Bankruptcy. It is a contract between you and your creditors. Creditors will reasonably expect their prospects of recovering money to be at least as good as in Bankruptcy. Most IVA’s last for five years, and any balance remaining is then written off by your creditors.
Am I insolvent?
You are insolvent if your debts are higher than your assets and you are unable to meet payments as and when they fall due.
Am I going to lose my home?
In most cases, you will not be required to sell your home in an IVA. However, creditors do ask that during the final year of the Arrangement, you re-mortgage your property and pay the maximum amount affordable from the equity in your property into the IVA. As secured borrowings are not included in an IVA, you are required to maintain your mortgage payments. If you do become in arrears with your mortgage and the secured lender wishes to re-possess the property, then they are entitled to do so, and you are not protected by the IVA.
Are creditors forced to accept an IVA?
Creditors do not have to accept an IVA. However, if in the IVA it is a good return to your creditors, there is a good chance they will accept.
Are Nominee and Supervisor fees payable on top of my monthly contributions?
Nominee and Supervisor fees are taken from the contributions that you pay into the Arrangement each month.They are agreed by your creditors and you are not liable for them on top of your monthly payment.
Are some creditors less likely to approve an IVA than others?
No, all creditors will look at each case individually.
Are the terms of the IVA always fixed for its full duration?
In most cases they are. However, if you are unable to realise equity in your property during the final year, creditors can occasionally request the IVA to be extended for twelve months so that contributions can be made.
Are there any creditors I cannot include in my IVA?
Secured creditors cannot be included in an IVA unless it is for a shortfall on a property that you are no longer residing in. In addition, the following cannot be included in an IVA: Child Support Agency debts, student loans, motoring fines, and utility bills that you are continuing to use.
Are you regulated?
Yes, we are regulated by the Insolvency Practitioners Association.
Can all my creditors be included in the IVA?
Any unsecured debt can be included in the IVA, excluding the Child Support Agency, student loans, motoring fines, and current utility bills.
Can an IVA help me repay off all my debts?
Yes, it can help you repay unsecured debt at an amount you can comfortably afford each month.
Can anyone enter an IVA?
Yes, if you can make monthly contributions over £200 per month and have unsecured debt of £15,000 or more.Alternatively, if you cannot make contributions but wish to offer a lump sum payment to your creditors by way of a third party or sale of a property, this can be offered to your creditors.
Can changes be made to the proposed IVA?
Yes, once an IVA is in place, if your circumstances change and you make the Supervisor aware of the situation, a creditors meeting can be called to vary the terms of your Arrangement.
Can creditors change their minds if the IVA has been agreed?
No, once the IVA has been accepted by creditors, they are bound by the terms of the Arrangement. The only time creditors would vote on the IVA again is if you wish to vary the terms of your Arrangement.
Can I arrange an IVA directly with my creditors?
No an IVA can only be processed through a company specialising in insolvency.
Can I buy a property during my IVA?
If you were to buy a property whilst in an IVA, it would fall as an asset in the Arrangement. In addition, you may struggle to obtain a mortgage as your credit rating will have been affected because of the IVA.
Can I cancel my IVA?
Whilst you are in the IVA, if you decide that you no longer wish to continue with the Arrangement, you must inform the Supervisor. It may be the case that a variation meeting may need to be held. However, if this is not the case, you can cancel the Arrangement once it has been put in writing.
Can I carry on with my business?
Yes, you can continue to trade whilst in an IVA. In addition, it does not prevent you from being a company director.
Can I change my payment date?
Yes the date can be arranged to suit you. You can also amend the date whilst in an IVA, but you should contact the Supervisor to confirm this is taking place.
Can I do an IVA without it affecting my property/house?
Any assets that you have must be disclosed to the Nominee/Supervisor. If your property is in negative equity during the final year, then you will not be expected to realise any equity. However, you may be asked to make payments for an additional twelve months.
Can I enter into an IVA if I am a home owner?
Yes, you can enter into an IVA if you own a property, rent or live with parents.
Can I enter into an IVA if I have already received a statutory demand?
Yes, but when you initially seek advice, you must notify the advisor that you have been served with a demand so that action can be taken to prevent a Bankruptcy Order being made.
Can I finish my IVA early?
Yes, if you would like to offer creditors a lump sum payment to finalise the IVA, then a meeting of creditors would need to be held. However, there is no guarantee that creditors will agree to an early settlement.
Can I go into an IVA with my partner?
Yes, you can enter into an IVA with your spouse or partner if you both owe money to your creditors.
Can I keep my bank account?
Yes you can keep your current account with your bank if you do not have an overdraft on the account and if you do not owe the bank money by way of a loan or credit card. If you do, they can freeze your account so we advise you open a new bank account with no overdraft facility with a bank that you do not owe anything to.
Can I keep my car while in an IVA?
In most cases you are able to keep your vehicle. However, if creditors believe that the vehicle can be sold and you can get a cheaper vehicle with the sale proceeds being paid into the Arrangement, they can request that you do this. If the vehicle is needed for work or you need the vehicle for another reason, this can be put to creditors. Alternatively, if you have a vehicle on finance, in most cases, you can continue to pay the finance to the hire purchase company and retain the vehicle.
Can I keep my IVA private?
An IVA does not get published in the newspaper. However, it does go on the Insolvency Service website but can only be found if it is searched for by your name.
Can I keep using my credit cards or take out a new loan during an IVA?
No, you cannot use any form of credit whilst in an IVA except for public utilities.
Can I obtain an IVA if a Bankruptcy Order has been made against me or if any of my creditors are taking court action against me?
If it is court action but a Bankruptcy Order has not been made, then you can obtain an IVA. However, if a Bankruptcy Order has been made, you would have to apply for the Bankruptcy Order to be annulled and be able to re-pay monies to your creditors.
Can taking out an IVA adversely affect my credit rating?
Yes, your credit rating will be affected if you are in an IVA.
Do all my creditors have to agree to an IVA?
No, 75% or over by value of your creditors who vote in favour of the IVA will mean that the IVA is accepted.
Do I have to attend the creditors meeting in an IVA?
In the majority of cases, you will not need to attend the creditors meeting, but you must be contactable by telephone on the day of the meeting.
Do I have to meet the Insolvency Practitioner?
No, you do not need to meet the Insolvency Practitioner unless they specifically ask to meet you. However, this does not happen very often.
Do I have to tell anyone?
No, it is private and confidential.
Does the Insolvency Practitioner represent me or the creditors?
The Insolvency Practitioner represents you whilst drafting the paperwork for an IVA. However, the Insolvency Practitioner has a duty to represent the creditors as they are to get the best possible return to your creditors.
How are debts with joint liability treated with respect to an IVA, when only one is applying for an IVA?
If you have a debt that is in joint names, then you are both liable for the debt. You must include the debt in the IVA, but the creditor can still contact the other party for payment.
How are savings accounts or endowment policies impacted by an IVA?
Any savings or endowment policies you may have must be notified to the Nominee/Supervisor. Where you are able to realise funds, you will be asked to do so for the benefit of creditors.
How are payments made?
Payments are made from any surplus income you have each month after paying your general living expenses.
How do I know how much I will have to pay through my IVA?
It will all depend on the disposable income you have each month. The advisor will go through your income and expenditure with you and agree an affordable monthly payment to be put to your creditors. However, creditors can ask for an increase in your payments if they believe you are able to do so.
How does an IVA affect my personal pension?
A pension does not form as an asset in an IVA. However, you may be asked to reduce or cease payments to the pension provider whilst the IVA is in place.
How long does an IVA last for?
In the majority of cases, an IVA will last for five years.
