A:  What is an IVA ?

Using Government legislation that is designed to help you clear debt, an IVA is a formal agreement between you and your creditors and stops ALL creditor demands. It enables you to pay off your debts in affordable monthly payments over a fixed period (usually 60 months).

A:  How can an IVA help me?

Once set up and if you continue to pay the agreed amount each month you’ll be protected from any further action being taken against you by your creditors. Your credit rating will not be as seriously affected as it would in bankruptcy.

If you stick to the agreement for the full term, your creditors write off any unpaid debts.

A:  What will happen if I cannot meet my payments?

The Insolvency Practitioner will agree the payment plan that best suits your needs. This should ensure you can meet your payments for the duration of the IVA. If your circumstances do change and you find that you are unable to meet your payments, they will try to renegotiate the terms of the agreement with your creditors.

A:  What happens when the IVA is finished?

As long as you have fulfilled the terms of the agreement, your creditors will have no further claim against you and the balance of any remaining unpaid debts is written off.

A:  Do all my creditors have to accept an IVA?

To approve your IVA, at least 75 per cent (by debt value) of the creditors who vote at a meeting, must accept your proposals. Even if they don’t vote, or they vote against your proposals, each of your creditors will be bound by the agreement as long as it has been accepted by this majority.

A:  Why would my creditors accept an IVA?

In accepting an IVA, your creditors will expect to get a better return than they would from any other reasonable alternative, and your payment proposals should demonstrate this to be the case. Your creditors will also benefit from the fact that your IVA will be monitored independently.

A:  Will an IVA protect my house?

One of the key benefits of taking out an IVA over bankruptcy is that the individual’s home is safe from repossession. However, if you own your own home it is likely that you will have to release some of the equity in your property towards the total dividend.