Simple-ivas.com offers a professional debt management service to clients that need advice on personal insolvency. A dedicated advisor will analyse your unique situation to ensure an Individual Voluntary Arrangement (IVA) is the right solution for you.
An Individual Voluntary Arrangement (IVA) is a private agreement between yourself and your creditors that allows you to take control with a debt management plan and pay off outstanding debts over a 5 year period.
Individual Voluntary Arrangements help many people in difficult circumstances become debt free and help manage their debt. If you need debt help call our IVA Helpline or fill out the online form to see if you qualify for an Individual Voluntary Arrangement.
IVA: A way out of serious debt
Individual Voluntary Arrangement: Explained
An Individual Voluntary Arrangement (IVA) is an important solution to people in serious debt. An IVA can reduce your debt payments, freeze interest on debts and put an end to the anxiety of being chased by creditors demanding payment.
How an IVA works
An IVA has to be set up by a licensed professional. After contacting one of our Insolvency Practioners, we will arrange a formal agreement between you and the people you owe money to. This legally binding agreement allows you to make reduced payments on the total amount of debt you owe, ensuring you only pay back what you can afford. The repayments are calculated on your affordable disposable income. After five years, any outstanding debt will be written off, leaving you completely debt-free. In some cases, an IVA can write off up to 75% of debts.
IVA: Is it right for me?
Our Insolvency Practitioners will assess your individual situation and advise on whether an IVA is the right solution for you. If a decision is made that an Individual Voluntary Arrangement is the best way to manage your debt, a repayment amount is agreed with you based on the information you provide about your finances.
IVA: What Next?
After checking and signing the IVA proposals with your Insolvency Practitioner an application is made to the court for an Interim Order. An IVA proposal will be prepared by us and presented to your creditors. Your creditors will be asked to approve the agreement. Once agreed, creditors will not be able to take legal action against you.
Individual Voluntary Arrangement: Why Choose an IVA
IVA: The Pros
- An Individual Voluntary Arrangement (IVA) offers an affordable way to clear unmanageable debts with a single monthly payment
- An IVA will leave you debt-free in just 60 months
- Once an IVA is agreed, your creditors are not allowed to add additional charges or interest to your debt by law
- An Individual Voluntary Arrangement (IVA) means that demands from your creditors for payments by letter or telephone are no longer allowed by law
- After an IVA is successfully completed, your credit rating will begin to improve
- An IVA protects you from court action as long as you uphold the IVA arrangement
- With an IVA there are no adverse effects on your professional status
IVA: The Cons
- With an Individual Voluntary Arrangement (IVA) you may have to release equity on any property you own as part of the IVA agreement
- An IVA is normally open only to those with unsecured debts of more than £12,000
- You will not be allowed to borrow any additional money if you take out an IVA.
- An Individual Voluntary Arrangement must be upheld for 5 years, if you fail to make a payment you could end up being made bankrupt, although payment holidays are negotiable.
Insolvency Explained
Insolvency is a condition when your financial liabilities or debts exceed your financial assets and income. Insolvency Practitioners are necessary if you want to conduct formal insolvency procedures, such as an Individual Voluntary Arrangement (IVA). This is because only a licensed Insolvency Practitioner may conduct IVA procedures. Insolvency is a regulated profession under the Insolvency Act 1986. If you are struggling with insolvency, there are two main solutions to manage this debt: Bankruptcy or an Individual Voluntary Arrangement.
Why Choose an IVA as a solution to Insolvency?
There are many reasons why you would opt for an IVA over bankruptcy to fix insolvency.
- An Individual Voluntary Arrangement is an attractive alternative to bankruptcy when dealing with insolvency as there is far less social stigma attached to an IVA
- An IVA is one way of discreetly solving insolvency. Bankruptcy notices are advertised publicly - usually published in your local press. An IVA is a discreet agreement between you and your creditors
- An IVA gives you more say in how your assets are dealt with and how payments are made to creditors.
- With an IVA you may be able to persuade your creditors to allow you to retain certain assets and hold on to your home.
Using bankruptcy as a solution to insolvency means there are restrictions attached:
- Bankruptcy as a solution to insolvency means you are not allowed to promote, form or manage a company without the permission of the court, whereas an IVA has no impact on your professional status.
- If you opt for bankruptcy to fix insolvency you will not have the right to hold certain public offices. This right is not affected if you opt for an IVA.
- With bankruptcy, your assets, including your home, can be seized.
Individual Voluntary Arrangements (IVAs) were set up precisely to offer people struggling with insolvency an alternative to the more severe option of bankruptcy.
Debt Management Explained
A Debt Management Plan is different to an IVA in that it is not legally binding but an informal process of negotiating with your creditors. A debt management plan aims to:
- Freeze or reduce interest on your debt
- Extend repayment terms in order to reduce monthly repayments
- Negotiate with your creditors to make your debt more affordable
- Negotiate with your creditors to try and reduce or write off some of your debts
Debt Management with an IVA
Why choose an IVA for your debt management?
Debt management using an IVA offers a solid solution. The difference between debt management plans that don’t use an Individual Voluntary Arrangement is crucial; debt management plans that don’t use an IVA are not legally binding.
- Debt management plans that claim to reduce your monthly payment or consolidate your debt don’t safeguard you in the same way a legally binding IVA can.
- Debt management plans may reduce your monthly repayments, but unlike an IVA, you will still have to pay all of your debt back. Such debt management plans then could be a much lengthier processes than an Individual Voluntary Arrangement.
- Debt management plans that don’t use an IVA means your creditors can still add interest, charges or increased payments, prolonging your debt. With an IVA you know exactly where you stand. And you know you will be 100% debt free by the end of the IVA term.
Don’t let debt drag you into a black hole. You can fix the problem with professional debt help and debt management. If you’re one of the thousands of people who find their debts have become unmanageable, a debt management plan can rescue you from financial meltdown. A debt management plan using an IVA will ensure you are debt-free in just 60 months. Simple-ivas.com can help. Call one of our Insolvency Practitioners on 0800 031 9802 and see how we can help regain control of your finances today.