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Individual Voluntary Arrangement

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How an IVA will affect you other financial affairs
 

An Individual Voluntary Arrangement (IVA) is a debt solution which involves yourself and your creditors coming to a legally binding agreement to extend your loan term and make reduced monthly repayments over this new timeframe.

Whilst an IVA can provide you with a flexible option to address your debt and alleviate the financial strain of debt in the short term, they nevertheless come with a number of dangers which need to be carefully considered.

The following page will explain the potential impact that setting up an IVA could have on your bank accounts and pension.
 
Bank accounts
 
When setting up an IVA, you might be required to make alterations to your bank account. This is to prevent your bank from automatically seizing cash from your account in order to recover repayment for outstanding debt you owe. A bank’s ability to undertake this type of action is called the right to off-set, though they are only entitled to do this if your bank account is directly connected to your creditors.

If you are aware that a direct link has been established between your bank account and your creditors -either through a direct debit scheme or your authorisation of their right to apply the continuous payment authority to your account – then you will need to transfer your money out of your cash immediately after deciding upon using an IVA, so that your money is left untouched.

If you are someone who is currently setting up an IVA, then your presiding insolvency practitioner should evaluate your situation and let you know if there is any necessity to change your bank account.

 

How can I tell if my personal bank accounts are connected to my creditor debts?

 

If you are currently finding it difficult to identify whether your bank account is connected to one or more of your creditor debts, use the below checklist to ascertain whether you need to start taking action to switch bank accounts:

 

  • Do you currently owe your bank money from a personal loan or credit card they have given you and also hold a current account with them? If so, then it is recommended you consult your insolvency practitioner immediately and start taking steps to switch bank accounts.
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  • Is the creditor you owe your debt to a subsidiary of your bank account provider? If so, then you should consider taking steps to switch bank accounts immediately.
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  • Is your lender and your bank part of the same umbrella business

 

 


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Altruistic aftercare

Having someone their during your debt is not enough to provide a high quality finance service, and our specialists will retain contact with you after your IVA to ensure you do not fall back into debt.


Court protection

Once you begin an IVA, all creditors will be barred from trying to take you to court, meaning that you can rest easy about the status of your debt.


Asset protection

An IVA allows users to keep ownership of their assets, such as their car or jewellery, providing that they are not worth over £5,000.


Interest removal

As long as the IVA arrangement is accepted by 75% of the creditors, all will be bound and late and interest fees will stop being applied to your debt, so it doesn’t spiral out of control.


Customer service

We have a staunch company policy of high quality customer service and as such will always be just a phone call away throughout the course of your debt solution if you ever require any help or advice.


Finance experts

All of our members of staff have worked in the finance industry for a number of years now and as such will analyse your financial situation and produce a number of custom solutions to your debt that reflect your circumstances the best.


Devoted aftercare

If you complete your debt solution successfully, we will retain contact with you in order to make sure that you are carrying on your upward trajectory with your money management.


Harassment Protection

Once you seek our help, we will take over all interaction with your creditor’s and work hard to ensure that they cannot harass you by letter, email or telephone anymore, so you can concentrate on tackling your debt.

Stop Creditors Chasing You!

    We’ll handle interaction with all of your unsecured creditors on your behalf and negotiate with them in order to try and attain the best possible revised repayment arrangement for your debt. Furthermore, our altruistic financial advisors will serve as the sole point of contact between yourself and your creditors throughout the creation, implementation and course of your chosen debt solution in order to protect you from the harassment often exhibited by aggressive creditors. Contact us today and start the process of tackling your debt problems head on today.


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  • How It Works
  • The Advantages
  • The Disadvantages
  • Is It Right For Me?

An Individual Voluntary Arrangement is a measure that can be taken be any individual who is legally classified as insolvent and has more than a single piece of unsecured debt. Under an IVA, an individual can come to an arrangement with their lenders which sees their loan term extended to 5 years and their monthly repayments for all creditors reduced to a single, lower payment which is determined in accordance with how much they are able to pay.

 

The process of entering onto an IVA usually takes on month, during which time a debtor must attain the help of a qualified Insolvency Practitioner, who will function as their official ‘nominee’ who manages, regulates and processes their IVA. The Insolvency Practitioner will arrange a meeting between an individual in debt and their creditors and propose a modified payment structure which will lower the debtor’s monthly repayments to all their lenders into a single, lower sum which is determined through a meticulous evaluation of how much they can afford. So long as 75% of the debtor’s creditors consent to the new arrangement, the IVA will begin immediately, and the insolvency practitioner will be then be tasked with collecting repayment off the debtor each month and distributing it.
Providing that the debtor sticks to the arrangement, all of their unsecured debt will be written off after 5 years, regardless of whether they have paid the full amount back during the arrangement. Failure to make the revised, lower monthly payments on time can result in the IVA being terminated and the debtors creditors pursuing further legal action, though it is possible to change the arrangement if special circumstances arise.

At Debt Success, we have a multitude of financial specialists who will help you with your financial difficulties and ascertain if an IVA is ideally suited to you. If you believe an IVA could help your situation, or have any further enquiries, call us and we will give you all the time you need to tackle, address and alleviate your financial problems.

  • Entirety of unsecured debt is written off on completion of 5 year period, regardless of complete payment.
  • You will be allowed to retain your home, so your day-to-day living will not be disrupted by property repossession.
  • Providing your car is worth less than £5,000, you will be able to retain ownership whilst on an IVA.
  • All interest and late fees on your loan will be frozen.
  • Once an IVA is put into place, a moratorium period is enacted which bars creditor’s from pursuing legal action against you.
  • Single payment each month made to address all your debt that is determined in accordance to how much you can afford to pay.
  • As with all debt solutions, your credit rating will be adversely affected by using an IVA and a record will remain on your credit history for up to 7 years.
  • You may be asked in certain cases to release equity in your property in the final year of your IVA via a remortgage.
  • Improvements to your financial situation whilst you are on an IVA must be immediately conveyed to your presiding insolvency practitioner who could ask you to pay a larger amount each month toward your debt.
  • You must acquire the services of a qualified insolvency practitioner, as they are necessary to manage your IVA, process your application and receive payments in the future to distribute to you creditors.
  • You have to be classifiable as insolvent. This means that your total debt must be larger than the total value of your assets combined.
  • You must be able to clearly display that you have no way to repay your debt at present.
  • You must not have made an application for an IVA or Bankruptcy in the last year.