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Testimonials
“We are extremely satisfied with the level of service and professionalism combined with a friendly attitude of all the staff we spoke to, and would like to thank everyone at Harrington Brooks very much.”
Mr and Mrs B, Liverpool
“We were really pleased with the efficient way that Harrington Brooks handled our enquiry and by the speed in which our mortgage was finalised.”
Mr and Mrs S, Birmingham
“I found the staff at Harrington Brooks were all very polite, helpful and understanding. I couldn’t fault the level of service we received from start to finish.”
Mr J, Warrington
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FAQ - IVA
1. What is an IVA?
IVA is short for Individual Voluntary Arrangement and was introduced as part of the Insolvency Act of 1986. Essentially, you come to an agreement with your creditors and arrange to pay a mutually acceptable amount every month. The duration of the repayment term is usually 60 months. After this time, you will be debt free. Even if you haven't repaid the debt in its entirety, any outstanding amount will be written off. These arrangements are legally binding, so you and your creditors have the security of knowing exactly where you stand.
2. Is an IVA right for me?
Do you have £ 12,000 or more of unsecured debt, divided between more than one creditor?
After meeting any secured loan repayments and your usual household bills, do you have at least £120 at the end of the month?
Trying to avoid bankruptcy?
If you answered yes to these three questions, an IVA could be what you're looking for.
3. Why do I need £12,000 of debt and £120 in my pocket at the end of every month?
Making an IVA application is a highly intricate legal process which must be carried out by a licensed Insolvency Practitioner. The process itself costs quite a lot of money and not everyone is eligible for an IVA, so please contact Harrington Brooks for further IVA information.
4. So, how does an IVA actually work?
For starters, Harrington Brooks will do all of the work for you. We make contact with your creditors and prepare a detailed IVA proposal. You check over the proposal first, then we send it to your creditors and they make the decision whether to accept or decline. Once they accept, the IVA becomes a legally binding contract.
5. Am I going to lose my home?
An IVA will not affect your mortgage or any other secured loan. These payments will always take priority and are settled before any IVA contributions are taken. So your home is safe as long as you keep up on the essential repayments.
If you have equity in excess of £ 5,000 in your property towards the end of your IVA, you may be required to remortgage and introduce additional funds into your IVA.
6. Will my IVA include all of my debt?
An IVA can only include your unsecured debts. If you owe money which has been secured against an asset and fail to meet the monthly repayments, your creditors are within their rights to enforce the sale of those assets.
7. How long will it take to get my IVA set up?
An IVA will usually take between 4 and 6 weeks to set up. However, in some more complex cases, it can take longer.
8. What's an Insolvency Practitioner?
A licensed Insolvency Practitioner is someone with a licence to deal with insolvency procedures.
A lot of Insolvency Practitioners were previously Accountants or Lawyers who have undergone additional training to qualify as an Insolvency Practitioner. By law, only an Insolvency Practitioner can propose and administer IVAs.
9. How long is my IVA going to last?
Typically, an IVA term is 60 months.
10. Will my IVA stop creditors from chasing me?
Your Insolvency Practitioner will be able to help you. They can apply to a County Court for an Interim Order, preventing your creditors from starting, or continuing with debt recovery proceedings. The Order will remain in place until your IVA proposal is agreed with all of your creditors, at which point, the IVA itself provides you with protection.
After the IVA has been agreed and accepted by all parties involved and as long as you keep up to date with your repayments, your creditors aren't even allowed to contact you.
11. Can I keep my IVA private?
An IVA is a totally private legal agreement between you and your creditors. However, details are published on a register maintained by the Department for Business Enterprise and Regulatory Reform which is viewable online. The sole purpose is to allow banks, credit card companies and other legitimate finance companies to conduct credit checks.
12. Can I hang on to my business?
Yes. This can be a complex area though. If you are self employed, you can qualify for an IVA but we'd recommend that you contact us so we can discuss it in depth with you.
13. Can I keep my bank account?
You can if it's in credit, but an overdraft will be included in your IVA. You can always open another account with a bank that you don't owe money to and Harrington Brooks can help you do this. Please contact us today to see how we can guarantee you a bank account, all we need is proof of identification.
14. If I've been made Bankrupt, or I have a CCJ, can I still apply for an IVA?
You can still apply for an IVA if you've been made bankrupt. After you've made an application, our Insolvency Practitioner will make contact with the appropriate authorities. They'll negotiate with your creditors and highlight the benefits of an IVA as opposed to bankruptcy. The bankruptcy will be annulled upon approval of your IVA.
You can still go ahead with the IVA even if one of your creditors has obtained a CCJ against you. They'll have no priority over your other creditors.
15. What happens if I can't afford the IVA payments?
If your financial circumstances change, contact your Insolvency Practitioner immediately. In certain circumstances IVA's can be changed. If it's a short term problem, emergency payment breaks may be granted at your Insolvency Practitioner's discretion. Miss payments without your Insolvency Practitioner's permission and there is a chance your creditors will initiate bankruptcy proceedings.
16. Can taking out an IVA adversely affect my credit rating?
Chances are, if you've have borrowed too much and can't pay it back, your credit rating is pretty damaged already.
However, a bad credit rating affects your ability to borrow money and, at this point, that's the last thing you should be doing. An IVA will remain on file for 6 years; a year longer than the IVA term. After 6 years, the IVA will be removed from your credit file and your rating will start to improve.
17. How much is my IVA going to cost?
We agree an amount with your creditors, to covers the set up and management of your IVA. This payment is deducted from your monthly debt repayment.
18. How much will I pay my creditors?
Everyone's payments are based on their circumstances. Your creditors will need to decide whether they feel that the repayment amount is fair and serviceable to both parties and they'll do this before they decide whether to accept or reject any IVA proposal. There are national guidelines used to discern reasonable amounts for your day to day expenditures. For your utilities and rent or mortgage payments, the real figures are built into the IVA.
19. How much can I afford to pay into my IVA each month?
We will work with you to determine your income and expenditure, without factoring in any of your unsecured debt. The residual funds after calculating your income minus expenditure is the figure we'll use to determine your unsecured debt repayment.
Taking the table below as an example, we would expect a contribution of £ 250 to your IVA.
| Monthly Income | Monthly Expenditure | ||
Your take home pay |
£1,200 |
Mortgage / Rent |
£700 |
Partners take home pay |
£690 |
Council Tax |
£100 |
Other income (benefits, maintenance) |
£100 |
Water / Gas / Oil / Electricity / Phone / Mobile |
£100 |
Food/Household/Clothing |
£600 |
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Car Expenses / Finance |
£190 |
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TV License/Rental/Sky |
£30 |
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Public Transport |
£20 |
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Total Household Income |
£1990 |
Public Household expenditure |
£1740 |
Monthly disposable income |
£250 |
20. How much of my debt is actually written off?
Everyone's circumstances are different so the amount your creditors will settle for depends on your finances.
| Example of Debt Write off: | |
| Your unsecured debts | £30,000 |
| Contracted Monthly Payment | £750 |
| Disposable Income | £250 (from the above example) |
| No. of months in your IVA | 60 |
| Contributions to your IVA | £15,000 (£250/month x £15,000) |
| Debt written off | £15,000 (£30,000 - £15,000) |
| Fees | £3,000 |
| Amount available to your creditors | £12,000 (£15,000 - £3,000) |
| Debt written off | £18,000 (£30,000 / £12,000) |
| Debt written off | 60% (£18,000 / £30,000) |
21. Who regulates IVAs?
Insolvency Practitioners must be licensed by one of these regulatory bodies:
- Association of Chartered Certified Accountants (ACCA)
- Institution of Chartered Accountants in England and Wales (ICAEW)
- Institute of Chartered Accountants Scotland (ICAS)
- Secretary of State for Business, Enterprise and Regulatory Reform (BERR)
- Insolvency Practitioners Association (IPA)
- The Law Society
22. Can I pay off my IVA early?
Yes. Should your circumstances change and you wish to make a lump sum payment, Harrington Brooks can arrange a variation meeting with your creditors.
However, if you are the beneficiary of any 'windfall', like an inheritance, then a clause in your IVA contract requires you to pay those funds into your IVA.
23. What if a creditor doesn't agree to my IVA?
To have an IVA approved, your proposal must be accepted by 75% of your creditors voting. However, this percentage is worked out by amount of debt owed. So, if you owe £40,000 in total and every creditor voted, you'd need £30,001 worth of votes to be in favour of the IVA.
So, if the creditor refusing to accept the IVA is owed over 25% of your total debt, the IVA proposal will fail.
Essentially, our Insolvency Practitioners won't proceed with any proposal which they deem to be unlikely to succeed. That is, to get enough votes. If your Insolvency Practitioner agrees to take on your IVA proposal, chances are it will pass.
24. Can I cancel my IVA?
Should you find yourself unable to continue with your IVA, we can terminate it at any time. However, this will mean that any funds received will be distributed amongst your creditors and they will start other debt recovery procedures against you.
25. Will my creditors still send me letters?
It's possible that you'll receive some correspondence from your creditors when your IVA is set up but after a couple of months, this should stop.
26. How many creditors do I need to qualify for an IVA?
You need 2 or more creditors to qualify for an IVA.
27. Can I go for an IVA if my creditors are taking me to court?
Once the IVA proposal is drawn up, the Courts will be notified and will usually halt legal proceedings. If not, a Harrington Brooks Insolvency Practitioner will write to the Court and petitioning creditors on your behalf.
28. What happens after my IVA?
Providing you fulfil the points of your IVA proposal, your creditors can make no further claim against you and all of your outstanding debt is cleared.