Debt Management Plan
IVA Debt Solutions 
An IVA may possibly be the best debt solution should you be struggling with unsecured debts, especially if you are unable to make monthly payments but want to avoid bankruptcy.
The main difference between an Individual Voluntary Arrangement and other informal debt management plans is that it is a legally binding contract between you and your creditors. This means that you would reach an agreement with your creditors and would make arrangements to pay what you can realistically afford over a five year period. The rest of your debts would be written off at the end of this period. This means that up to 75% of your original debt could be written off and you can avoid filing for bankruptcy.
Your Insolvency Practitioner will attempt to negotiate with the majority of your creditors and could successfully reduce the amounts payable to them. Your creditors might welcome this debt solution, as they stand a chance of getting more out than if they were to declare you bankrupt. What’s more, they could also claim tax and VAT relief on the bad debt.
Standard IVA agreements will ensure that you can make affordable monthly payments. These payments would be paid directly to your Insolvency Practitioner who would manage those funds to pay off a portion of your debt. Once the five year period is finished, you will have no unsecured debt.
As this type of debt solution is a legally binding contact, you would need to be clear that you are able to commit to the payments you agree on. An IVA is not just legally binding to you; it would also disallow your creditors from taking any further action against you. Another important difference between IVAs and bankruptcy is that it should be a private arrangement between you and your creditors. Therefore, no details about you obtaining an IVA will be published and, most importantly, your job will not be at risk should someone find out you have an IVA.
How does an IVA work?
As there are many variables with an IVA, it is best to seek advice from an Insolvency Practitioner so that they can give you advice which is tailored to your circumstances.
All you need to do is apply for an Individual Voluntary Arrangement through us. One of our professional debt advisors will contact you to discuss your circumstances and determine whether an IVA is your best option. They will discuss your current financial situation with you, and from the information you provide, they will use this to provide an IVA proposal that your creditors will accept. They will also look at your financial situation in a holistic manner so that you will not find yourself in the same situation again in the future.
The process itself takes between 4 to 6 weeks as its quite a complex scenario as there are many parties involved. This time will be spent doing the initial fact-finding, writing the proposal, organising signatures and distributing any relevant information. Once you’ve outlined your circumstances and provided us with the supporting documentation, we will normally do everything else on your behalf. You just need to read the proposal carefully and sign the agreement.
The final version of the proposal would be submitted to the court and your creditors and a meeting would be held within 2-4 weeks. Your presence might not be needed at this meeting, as your Insolvency Practitioner, who acts as Chairman, would represent you and would propose the arrangement formally.
This meeting, which aims to establish whether your IVA proposal should be accepted or rejected, does not guarantee the acceptance of your proposal. The only guarantee is that the Insolvency Practitioner is not likely to propose an IVA that might not succeed.
The creditors with debts that comprise 75% (no matter if it is just one single creditor) will have the final say on whether or not to accept the proposal. The IVA terms should bind everyone, even though not all of them voted for its acceptance.
Should you keep up your repayments during this period, you will be completely discharged of any unsecured debts.
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