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Individual Voluntary Arrangement

What is an Individual Voluntary Arrangement?

An Individual Voluntary Arrangement (IVA) is a great solution for people who have debts from £5,400 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.

We offer a range of debt solutions to best suit you.

Here’s an example of how an Individual Voluntary Arrangement (IVA) could work:

 

  • Overdraft £1,260
  • Personal loan £15,000
  • Credit card £8,900
  • Credit card 2 £5,900
  • Catalogue £0

Total: £31,060

With an IVA

  • 60 Monthly contributions £200
  • Total Paid £12,000
  • Total written off £19,060

61% of Debt Written off

An example case which assumes circumstances remain the same and the IVA is adhered to and successfully completed. Monthly contributions include all fees. Fees are agreed between your Insolvency Practitioner and lenders.
Click here to view fees.

What a Individual Voluntary Arrangement will do for you

Lower your debt repayments

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.

Freeze interest and charges

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.

Provides full protection from lenders

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.

Write off debt

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.

Clear debt typically in 60 months

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!

Ongoing support and advice

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.

IVAs - what you need to know

What we charge and why

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.

Will an IVA be accepted by my lenders?

Baines & Ernst provide the IVA Advisory Service, once we have all the details regarding your financial situation, we will pass your case on to an Insolvency Practitioner for further assessment. The Insolvency Practitioner will draft an IVA proposal which will be given to 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.

A copy of our IVA Advisory Service Terms and Conditions can be viewed here.

Will lenders write off debt?

An IVA typically lasts for a period of 5 years, after this time any debts that still exist will be written off – providing you have kept to the terms of the IVA and have successfully completed the arrangement.

If you are a homeowner, you may be asked to release equity from your property to help repay your lenders in the 4th year of the IVA.

If you have to remortgage your home to release equity from your property, you could find it hard to secure a mortgage with a lender because you have been involved in a debt repayment arrangement. In this case, your IVA could be extended for another year depending on the amount of debt that is owed– but this will all be discussed with you prior to starting the IVA.

You do not need to own a property to qualify for an IVA; therefore if you are not a homeowner, you will not be asked to make additional payments towards the IVA.

Will my credit rating be affected?

If you have already missed repayments or made late payments towards your debts, then your credit rating may already be affected.

By entering into an IVA, you will no longer be repaying debts at the amount originally agreed with you lenders, which means your credit rating will be affected for six years from the start of your IVA.

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.

How are repayments calculated?

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.

These details will be passed to an Insolvency Practitioner who will create an IVA proposal which will be presented to your lenders.

Repayments will be based on expenditure guidelines that have been put into place to ensure that you have enough money to maintain a reasonable standard of living. This will be discussed with you prior to starting an IVA so you know exactly what your repayments will be.

If your circumstances change, it is essential that you speak to your assigned Insolvency Practitioner so that you don’t fall further behind with you debts as failure to keep to the term of the IVA could lead to Bankruptcy.

What debts can be included in an IVA?

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.

Is there a cooling off period?

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.

Insolvency Service guide

You can download the free guide from The Insolvency Service. ‘In Debt? Dealing With Your Creditors’ which provides an overview to dealing with debt and 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.

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Answer a few simple questions and we'll help you find your solution.
  • Total unsecured debt: £500

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