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IVA (Individual voluntary arrangement)

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IVA (Individual voluntary arrangement)

This section covers what an IVA (Individual voluntary arrangement) is, how an IVA works, the benefits and disadvantages of an IVA and what you need to do to get an IVA to deal with your debts.

What is an IVA?

An Individual Voluntary Arrangement is a formal and legally binding agreement between you and your creditors. It allows you to pay a monthly payment towards your debts, but at a level you can afford rather than the amount your creditors are asking for. You agree to pay this monthly amount for a set period of time – usually 5 or 6 years. After this set period of time any remaining debt will be written off. It provides both parties with certain legal protections whilst you solve your debt problems.

Once the agreement is in place your creditors must stop all further interest and charges on your debts. All letters and phone calls from your creditors in relation to your debts should then cease. Once the 60 months have ended (in some cases 72 months), and you have kept to the arrangement any outstanding debt included in the IVA is written off.

IVAs are not available if you live in Scotland. In Scotland, a protected trust deed is a similar solution, but it’s important to note that it has different benefits, risks and fees associated with it.

Benefits of an IVA

  • Make one affordable monthly repayment.
  • Reduce your monthly outgoings inline with what you can afford.
  • Protects your home from creditors if you are a homeowner.
  • Freezes interest and charges on your debts
  • Stop letters and phone calls from your creditors.
  • Stops debt collectors and bailiffs from calling you.
  • Prevents further legal action and attachment of earnings

What do I need to get an IVA?

  • You must have two or more creditors.
  • You must be struggling with payments to your debts
  • You must owe more than £5000 of unsecured debt (credit cards, loans, overdrafts etc.)
  • UK citizen (IVA specific for England, Wales and Northern Ireland)

Need debt advice?

Our panel of specialists can quickly advise you of your options if you are considering an IVA. Simply call the team on 0800 088 2208.
Alternatively take the online IVA test and see if an IVA is right for you.

More about IVA's

Do I qualify for an IVA?

Use our Free Online Our IVA Qualification Check to see if an IVA could be the right option for you.

What is an IVA?

This section covers what will happen to you if file a bankruptcy petition or if you have received a creditors bankruptcy petition. There are three ways a bankruptcy petition can take place in the UK.

  • You can petition for bankruptcy, known as a debtor’s petition
  • A creditor’s petition, for a creditor to apply for a bankruptcy order to be made against you
  • A supervisor’s petition, which your supervisor in an IVA would use
Read our full guide to what is an IVA...

What Is A Statutory Demand?

A Statutory Demand is a formal document which can be issued if you have failed to make payments to a debt. This is the first step of the legal process a creditor may use to make you bankrupt to recover their money. Read our full guide to Statutory Demands...

What Will Happen To My Home If I Go Bankrupt?

The Official Receiver or the trustee (if an insolvency practitioner has been appointed in place of the Official Receiver) may have to sell your home to go towards paying your bankruptcy debts. Read our full guide to what happens to your home in bankruptcy...

Can I Keep My Car If I Go Bankrupt?

The ownership of your vehicle will be affected by bankruptcy whether it's owned outright by you, or if you're paying for it through a finance package.

Your car or any other motor vehicle is an asset. The official receiver can sell your vehicle to help pay your bankruptcy debts.

Read our full guide to what happens to your car in bankruptcy...

What Happens To My Assets In Bankruptcy?

When you are declared bankrupt, you surrender all your assets, i.e. possessions of value, including any interest in your home.

The Trustee must be informed of all assets, it is their decision as to what you can keep. They will arrange for their sale, using the proceeds to pay the fees, costs and expenses of the bankruptcy, before paying the creditors.

Read our full guide to what happens to your assets in bankruptcy...

What Happens To My Pension If I Go Bankrupt?

Part or all of your pension may be claimed by your trustee in bankruptcy, whether you are receiving it now or it is due in the future.

When he or she has all the information about your pension, the official receiver or your trustee will be able to tell you what part, if any, of your pension is being claimed as an asset in your bankruptcy.

Read our full guide to what happens to your pension if you go bankrupt...

Which Debts Are Not Included In Bankruptcy?

You may be wondering what types of debt are included in bankruptcy. Bankruptcy writes off most types of debt, but not all of them.

Child maintenance arrears, criminal fines from a magistrates' court or Crown Court, fraudulent debts and student loans are some of the debts that can not be included in bankruptcy.

Read our full guide to which debts are not included in bankruptcy...

What Happens To My Bank Account If I Go Bankrupt?

When you are declared bankrupt, you must stop using your cheque book and bank cards, and immediately surrender them to the Official Receiver.

Accounts are normally frozen by the bank when they are told about your bankruptcy by the Official Receiver.

Some banks allow bankrupts to continue to use existing accounts.

Read our full guide to what happens to your bank account if you go bankrupt...

What Happens At My Bankruptcy Hearing?

At your bankruptcy hearing, a district judge will consider the bankruptcy petition to decide whether or not to make a bankruptcy order. Once a bankruptcy order is made, you are then officially bankrupt.

You and the Official Receiver attend the Bankruptcy Hearing. Creditors can also attend the bankruptcy hearing if they wish.

Read our full guide to what happens at a bankruptcy hearing...

What Is The Official Receiver?

The Official Receiver is a civil servant in The Insolvency Service and an officer of the court. He (or she) will be notified by the court of your bankruptcy. He will then be responsible through his staff for administering the initial stage, at least, of the insolvency case. This stage includes collecting and protecting any assets and investigating the causes of your bankruptcy.

Read our full guide to what is the Official Receiver...


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