A Guide To IVAs Or Individual Voluntary Arrangements In The UK

An IVA is a formal debt management solution used by residents of England or Wales, often with at least £8,000 worth of debt. An authorised individual must establish one and there are some costs involved. Despite these stipulations, this arrangement may be the best way to handle your unsecured debts. Read on to learn more and please contact our IVA advice professionals with any additional questions. Some Basic Advice… The IVA was created as an alternative to bankruptcy. It is an agreement between your creditors and you to repay all or a portion of your debts, typically within a five-year period. Though the law does not establish a minimum or maximum level of debt to qualify for an IVA, different providers will set their own minimum debt levels. There may be more suitable debt management solutions for those with lower levels of debt. An authorised debt specialist, referred to as an insolvency practitioner, or IP, is the only individual who may establish an IVA for a UK resident. Similar to what occurs with a debt management plan, a revised repayment is negotiated with creditors. There is no minimum or maximum level of permitted repayment, only what creditors and insolvency practitioners consider acceptable. You make a single payment monthly representing all debts and the IP allocates the correct amount of money to each creditor according to the IVA arrangement. An individual voluntary arrangement requires payment of a nominee’s fee and a supervisor’s fee. These charges are included in the monthly payments you make to the IP but do not usually affect the total amount you must pay. The nominee’s fee is charged for work required to obtain agreement for the IVA. The supervisor’s fee is ongoing for the work performed by the IP. It is recouped on a regular basis, as outlined in the proposal. Why Choose An IVA? If you cannot afford to repay your debts in full within what would normally be considered a reasonable timeframe, an IVA may be the best option. It is an alternative to bankruptcy that allows you to stay in your home. Though you may need to reduce excessive spending, this can actually be a good thing because it will become easier to live within your means. Establishing An Individual Voluntary Arrangement There are several things you must do to get an IVA. The first is obtaining professional debt management advice to determine whether it is the correct solution to your debt issue. We offer this advice, so contact us today to begin exploring this option. If such a solution is deemed suitable, you must get an authorized IP to serve as the nominee. This individual will help with the preparation and will submit it to your unsecured creditors. Is This The Right Option For You? Fill Out Our Short Form To Get A FREE Debt Assessment. During the preparation process, the IP will ask for information regarding the type and amount of debts including interest and charges as well as complete information for relevant creditors. […]