Insolvency
What Is An IVA?

An Individual Voluntary Arrangement was introduced to give everyone a fairer chance when in debt. It is seen by all as a preferable alternative to bankruptcy.

An IVA is a formal agreement between someone who owes money (the debtor) and the people he or she owes money to (creditors).

An IVA proposal sets out how the debtor is going to repay the creditors, usually over a period of five years. In practice most creditors try not to make bankruptcy petitions. This is because the fees associated with bankruptcy are high meaning there is often little left for the creditors.

 
What are the advantages?
 
You may only pay back a percentage of your debts
You only have to make one monthly payment or in some cases, a one-off lump sum
The Arrangement is legally binding so that your creditors cannot change their minds once they have agreed
Once the IVA is in place your creditors cannot bring any other action against you as long as you maintain your agreed monthly payment
You are able to operate a 'normal' bank account as long as it does not have an overdraft facility
No publicity in the local papers
It may safeguard your property
Does not affect the ability to hold public office
An IVA does not affect your professional status
 
What are the disadvantages?
 
IVAs are only suitable if you or another person can afford to make an offer of repayment to your creditors
Your creditors have to agree on the arrangement through a vote, however we will not suggest this course of action to you unless we think there is a good chance that your creditors will accept your offer
If you do not make the payments to the IVA it is likely that the Arrangement will fail and your creditors will be able to take other action against you. It may also result in your bankruptcy
 
Individual Voluntary Arrangement (IVA)
 
Key points:-

An Individual Voluntary Arrangement can give you a level of protection against impatient creditors.

An individual can put together a plan of action and payment for their creditors to vote upon.
A bankruptcy order can be cancelled if a voluntary arrangement has been approved
Individual voluntary arrangements remain on the public register for two years after the date of either completion or termination of the arrangement.
The debtor must have 75%, of those creditors who vote for an individual voluntary arrangement to get it approved.
If the individual voluntary arrangement fails then the creditors can apply for the bankruptcy of the individual
   
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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Adding existing debt to your mortgage will increase both the repayment term and the overall cost.
 
 
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