What is an IVA?
An IVA (Individual Voluntary Arrangement) is a great solution for people who have debts from £12,000 and are struggling with repayments.
Lenders are required by law to freeze interest and charges – so your debts will not increase. And any debts that still exist at the end of the IVA, which typically lasts for 5 years, will be written off. This means you could be free from debt in as little as 60 months!
It is a legally binding solution which means you’re offered full protection from lenders who could try to make you bankrupt. This is particularly beneficial for homeowners who may be worried about losing their home because of debts.
Repayments will be based on what you can afford after all your other bills such as mortgage / rent, utilities and food have been taken into consideration – making repaying debts much more affordable within your budget.
If debts are stressing you out and you’re struggling to juggle debt repayments, an IVA could be the right solution for you.
Call today for a no-obligation financial review, or complete the enquiry form and a member of our friendly team will call you back.
What an IVA will do for you
We’ll draw up a realistic repayment plan with you – making sure you have enough money every month to pay for rent / mortgage, household bills and living essentials.
We will then pass your case over to an Insolvency Practitioner (IP) who will then negotiate a lower, more affordable repayment rate with your lenders.
An IVA is subject to lenders agreeing to be included in the Arrangement – which is not always guaranteed. You can learn more about this in the ‘Fees and key info’ section at the bottom of the page.
Once the IVA is set up, payment will be distributed to your lenders every month.
These lower repayments will be fixed for a period that typically lasts for 5 years.
Because an IVA is a legally binding agreement, lenders included in the IVA must freeze all interest and charges by law – this means your debts will not increase.
The IVA will provide full protection against lenders – this means they cannot contact you at all during the IVA period.
What’s more, they cannot make you bankrupt – giving you greater peace of mind that your financial situation can only get better.
Another great benefit of an IVA is that when the IVA period comes to an end, any debts included in the IVA that still exist will be written off!
If you are a homeowner, you may be asked to release equity from your property in the final year of the IVA to help repay your creditors, but this will depend on your personal situation.
Providing you keep to the terms of your IVA and follow the advice outlined to you by your appointed Insolvency Practitioner, then you can be expect to become free from unsecured debts in 60 months!
From your initial enquiry right through to when you clear your debts, you will receive support every step of the way.
Your Insolvency Practitioner is on your side until you finish your IVA, so if you have any problems or questions, all it takes is a phone call to get the help and advice you need.
IVA - Fees & key info
At Baines & Ernst, we help people beat debt by offering the highest standard of service, expert debt advice and affordable solutions. Our fees depend on your personal circumstances, and we’re always honest and upfront about these costs. Click here to learn more about our fee structure for all of our services.
Baines & Ernst provide the IVA Advisory Service, but we cannot guarantee the result of the IVA proposal – as drafted by the Insolvency Practitioner – will be accepted by your lenders. For an IVA to be approved and interest and charges to be frozen, the proposal will need to be voted on and approved by lenders representing 75% of the value of your debts.
needs to be accepted by 75% of the lenders (by value).
A copy of our IVA Advisory Service Terms and Conditions can be viewed here.
A record of your IVA will be held on your credit file for six years from the start of the IVA. Once an IVA is approved by your Lenders, it will be listed publicly on the Individual Insolvency Register.
A financial review will be carried out with you to work out a realistic repayment plan once all your other bills including rent / mortgage, household bills and living essentials have been taken into consideration.
If you are a homeowner, you may have to re-mortgage your home after 4 years and release available equity to pay off some or all of the remaining debt.
Only unsecured debts can be included in an IVA, this means debts not secured against your property. Household bills, child maintenance repayments and secured loans are also excluded.
Typical unsecured debts that can be included are credit cards, store cards, personal loans, payday loans, catalogue accounts, bank overdrafts.
You will have a cooling off period of 14 calendar days from when the signed and returned documentation has been received, in which you can cancel the IVA.
Cancellations must be in writing and the Advisory Service fee will be refunded.
If an IVA fails you will be liable for the balance of the debt and fees.
You can view a free publication from The Insolvency Service ‘In Debt? Dealing With Your Creditors’ which provides an overview of some of the debt solutions that may be available to you.
Alternatively, if you’re in Northern Ireland, you could look at the Department of Enterprise, Trade and Investments ‘In debt? Dealing with Creditors’ guide, here. Residents of Scotland can also look at the Scottish Governments ‘Debt Advice and Information Package’ guide here.