Partnership Debt | IVA

What is an Individual Voluntary Arrangement?

An IVA is a legal agreement between you and your creditors where you pay back a portion of the debts that you owe. Reduced payments are negotiated with your creditors at a sum that is affordable to you. These payments go towards the total percentage of debt that you owe to your creditors.

An IVA generally lasts for 60 months (5 years). In some circumstances however, an IVA can be completed in a few months, but this would normally involve introducing a Lump Sum into the IVA, hence the name Lump Sum IVA.

Some IVA arrangements can last more than 5 years to introduce payments in lieu of a remortgage (if applicable to your case). In exceptional circumstances a small number of arrangements can last more than 6 years. The length of time your IVA will last will be determined in the IVA proposal, once all of your circumstances have been taken into account.

How does an IVA get approved?

In order to set up an IVA, there are certain criteria that must be met. You generally need debts from over £15,000 and more than two creditors. It doesn't matter whether you are a tenant or a homeowner. Due to the nature of an IVA being a formal agreement, it is not something you can set up on your own. You will need a Licensed Insolvency Practitioner or a company that employs Insolvency Practitioners.

At BusinessDebtAdvice.co.uk our experienced Debt Advisors are happy to go through your situation on the phone to see if an IVA is the best debt option for you and your business. We will do a detailed analysis of your situation, your income, your outgoings, your bills and debts and anything else that you might like to discuss. Then, if we determine that an IVA is your best course of action and you decide that you want to proceed, then we will take the necessary steps, along with our highly qualified Insolvency Practitioners, to put your IVA Proposal in place and forward it to your creditors for negotiation. If all goes well here and atleast 75% of your creditors (by debt balance) agree to the IVA, then your IVA can be set up.

Benefits of an IVA

1 easily affordable monthly payment based on your income and expenses
Unlike some of our competitors, we do not charge any Upfront Fees, saving you £100s
An IVA offers you protection from creditors
Creditor pressure stopped as creditors must deal with us
Can be complete in as little as 1 year if you can offer a lump sum payment
All interest frozen immediately
Suitable for tenants or homeowners, individuals or couples, and even business owners
We can setup an IVA in as little as 4 weeks

Disadvantages of an IVA

If you are a homeowner with equity in your property you may be required to introduce part of your share of this equity in the final year of the arrangement. A remortgage may be restricted and on less favourable terms. If you can’t get a remortgage your arrangement can be extended for up to another year.
If your circumstances change, and your insolvency practitioner can’t get creditors to accept amended terms, the IVA is likely to fail. You will still owe your creditors the full amount of what you owed them at the start, less whatever has been paid to them under your IVA.
If your IVA fails, your creditors may request that you be made bankrupt. This will always be discussed before your arrangement commences.
Your credit rating may be impacted for up to six years from the commencement of your IVA.

What living costs are allowed in an IVA?

In an IVA you will have an agreed budget for your all your living costs. There are allowances made for this in the agreement. These expenses will be mostly based in what you currently have to pay out each month. You should declare all normal monthly expenses to your creditors so they understand your situation more clearly. There may be some restriction on some expenditure items, such as mobile phone for example.

A fee is only payable where further services are requested. All fees will be explained in detail and discussed prior to commencement of any service or debt repayment plan. In the IVA our fees are included in your monthly payment to your creditors so you will not have to pay anymore than you can afford. More suitable debt solutions may be offered which may result in different fees applying and we will discuss those with you during your initial consultation. Creditors may still contact you with promotional material or to fulfil contractual obligations to you but they should deal with us in all aspects relating to the outstanding debts.
Acceptance of your IVA cannot be guaranteed but we will do our best. You must meet certain criteria which will be discussed with McCambridge Duffy advisors. Where we put a client forward for an IVA we believe they have an excellent chance of being accepted. Debts will only be written off where a client has made an agreed payment for a fixed period. In return the creditors agree to write off the remaining balance. Typically, our clients average debt write off is between 60-70% of the debt. What debt you have written off will depend on your individual circumstances and is subject to creditor approval and completion of the IVA. Your credit rating may be impacted for up to six years from the commencement of you IVA. Homeowners may be required to introduce equity if available.

Phonecalls: Calls from a landline are normally free. Please consult your provider if you are unsure. Calls from a mobile may be subject to charges. If you get charged just ask us to call you back for free.



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