The important question about an IVA.

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• Up to 75% of debts written off, depending on your circumstances
• Debt free in 60 months
• Stop all interest and charges
• No more stressful letters, visits or phone calls

An IVA could get up to 75% of your debts written off (in some cases) and leave you debt free within 60 months (5 years). Once the agreement is set up, your creditors must stop all further interest and charges on your debts. All phone calls and letters from creditors in relation to your debts should stop.

As soon as the 60 months have finished, and you have kept to the arrangement any outstanding debt is then completely written off!

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You will need to show the following:

• Proof of employment/income
• Unsecured debts of over £2,000
• Owe money to 2 or more creditors
• You are a UK resident

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Will an IVA effect my credit rating?

Yes, your credit rating is likely to be adversely affected and It will remain on your credit file up to 6 years after completion of the IVA.

Do you run a credit check on my application?

No, as you are not borrowing any money, there is no need for a credit check.

Can I get an IVA if I have CCJ's against me?

Yes. Entering into an IVA provides a way to avoid further recovery action even after a creditor has obtained a CCJ against you.

Will an IVA stop creditors from taking action against me?

Yes. As soon as the IVA is set up, you are protected from all further recovery action by your unsecured creditors providing you follow the terms of the arrangement.

Can I stop creditors taking action whilst I'm waiting for the IVA to be approved?

No, but you can apply to the courts for an Interim Order to prevent your creditors taking further recovery action until the result of your creditors meeting has been decided.

Will an IVA cover all of my debts?

No, they are only effective with your unsecured debts, personal loans, credit cards and arrears. Your secured debts such as your mortgage are not covered.

Do I have to be employed?

No. To enter into an IVA, you only need to take home more income than you need to live on.

Will being a homeowner or tenant effect my application?

No, not at all.

Will I have to release equity in my home?

You may have to release a proportion of any available equity in any property you own as part of your overall contribution to your creditors. This will usually happen after the 3rd year of the IVA.

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Are IVA's a type of Loan?

No, an Individual Voluntary Arrangement is a legal process whereby you can agree with your creditors to repay them what you can afford. This may result in paying back less than you actually owe.

How long does it take to get an IVA set up?

A typical IVA takes between 6 and 8 weeks to set.

Will interest and other charges be frozen while the IVA is being set up?

No, but any such interest and charges will be covered by the IVA when it is approved.

What happens if a creditor refuses the IVA?

Once the IVA has been accepted by vote at the creditors meeting, all creditors are bound by law to accept the arrangement. A credit or may refuse the IVA if that creditor owns more than 25% of the debt.

Do all creditors have to accept the IVA?

The decision to accept or reject an IVA is made by a vote of your creditors at a creditors meeting. You need to get 75% acceptance by debt value at that meeting for the IVA to go ahead. If less than 75% by debt value vote to accept the IVA, the IVA will fail.

Can I cancel an IVA once it has been set up?

No, an IVA is a legally binding process and, once it is set up, you cannot just cancel it if you change your mind.

What if I stop paying the IVA?

If you fail to keep to the terms of the IVA, your IVA supervisor (the insolvency practitioner) has the right to apply for you to be declared bankrupt and your creditors may petition for your bankruptcy.

What if my circumstances change?

If you are unable to maintain repayments because of changed circumstances, your supervisor in the IVA can request a variation to reflect your new circumstances.

How long do IVA's last?

They generally last for up to 5 years.

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