What is an IVA?
An Individual Voluntary Arrangement, also called an IVA, is a formal and legally binding agreement between you and your creditors – the companies you owe money to. It offers all parties protection as you work towards resolving your debt problems.
An IVA enables you to repay debts at a rate you can afford over a period of time – normally five years*. Any unsecured debts included in the IVA that you cannot afford to repay, will be written off at the end of the term. An IVA is subject to creditor agreement, which isn’t always guaranteed.
Applying for an IVA
An IVA is available to people who are struggling to repay unsecured debts and meet the following criteria
- Three or more creditors
- Over £15,000 worth of unsecured debt
- Problems meeting repayments
- Proof of income
Once the agreement is in place, your creditors must stop all further interest and charges on your debts – all letters and phone calls relating to these debts should also stop.
Providing you keep to the terms of the arrangement, any outstanding debts included in the IVA will be written off by your creditors at the end of the term, which is usually 60 months*.
For more information on Individual Voluntary Arrangements, visit our IVA FAQ page.
Find out how an IVA could help you clear your debts, call us on 0800 096 1331.
How can Baines & Ernst help?
As one of the UK’s leading debt solutions providers, we offer expert advice on managing debt. Our services are tailored to meet your specific needs to ensure you’re provided with the right solution for your individual circumstances, that’s why all of our initial consultations are free. If you meet the criteria for an Individual Voluntary Arrangement, we will offer an IVA Advisory Service.
If you would like to proceed with the IVA Advisory Service, Baines & Ernst will:
- Provide an IVA Advisory Service pack – this will give you full details on the IVA process and conditions. You will also be asked to provide details on your current income and outgoings, including information on your debts and creditors – our experienced advisors will help you throughout this process. We can also arrange for a representative to visit you at home to help you to complete the pack and answer any questions you may still have.
- Review this documentation and forward your case to a licensed Insolvency Practitioner (IP) who will create an IVA proposal which will be presented to your creditors. The IP will also negotiate lower repayment rates on your behalf.
- Communicate directly with your Insolvency Practitioner to ensure they have the relevant information to progress your case.
Dealing with debts can be daunting, but at Baines & Ernst, we’re here to support you. Visit our accreditations page to find out why we’re a leading choice for people who want to clear their debts.
For free initial advice, call us on 0800 096 1331.
Key Information and Fees – IVA Advisory Service and IVAs
At Baines and Ernst we’re committed to providing the highest standards of customer service at competitive rates. For information on our fees for our full range of services, please click here.
Baines & Ernst will provide the IVA Advisory Service with reasonable care and skill, but we cannot guarantee the result of the IVA Advisory Service or guarantee that your IVA proposal – as drafted by the Insolvency Practitioner –will be accepted by your creditors. For an IVA to be approved and interest and charges to be frozen it needs to be accepted by 75% of the creditors (by value).
A copy of our IVA Advisory Service Terms and Conditions can be viewed here.
Although you may become debt free upon successful completion of the IVA, a record of your IVA will be held on your credit file for up to six years, which will affect your credit rating and your ability to obtain credit in the future. Once an IVA is approved by your Creditors it is listed publicly on the Individual Insolvency Register. Homeowners may be required to re-mortgage after 4 years and release available equity to pay off some or all of the debt.
You must continue to make payments in full towards any rent or mortgage, hire purchase agreements, any loan secured against property, council tax and utilities such as gas, electricity and water. However, your Insolvency Practitioner will make suitable allowances for you to be able to afford your priority debts and your day-to-day living costs before they calculate how much you can afford to pay towards your other creditors. Only unsecured debts included within the IVA may be written off at the end of the period and those not included, such as secured debts, Government fines and child support payments will remain.
In line with the Consumer Protection (Distance Selling) Regulations 2000, you will have a cooling off period of seven working days from when the signed and returned documentation has been received to cancel the IVA. Cancellations must be in writing – a refund of the Advisory Service fee will then be issued.
Please note that Individual Voluntary Arrangements are legally binding arrangements and once approved do not have a cooling off period. However, within the Letter of Engagement you will have a seven day cooling off period from the date you sign and return the Letter of Engagement to your Insolvency Practitioner. Please note that if an IVA fails you will be liable for the balance of the debt and fees and this could lead to Bankruptcy.
We aim to provide a professional service at all times. However, if you are unhappy with the service that you have received, please follow our complaints procedure explaining why you feel we have not met your expectations.
We are committed to providing the very best customer service at competitive rates. View our fees section for more information.
*With an Individual Voluntary Arrangement your credit rating will be affected for up to 72 months. Failure to adhere to an IVA may result in bankruptcy. Homeowners may be required to re-mortgage after 4 years and release available equity to pay off some or all of the debt.
Baines and Ernst Ltd