Question1: What is an IVA?
Answer: An Individual Voluntary Arrangement is a contract between you and your creditors. You pay an agreed monthly sum, usually for 5 years. This is divided up between your creditors, who accept the sum in settlement of the amount you owe them.

Question2: How much will I need to pay?
Answer: The monthly payment will depend on your income and expenditure. It is agreed by you and your creditors so that it will be affordable. A standing order mandate will be set up for the payments.

Question3: What sort of people enter into IVA’s?
Answer: An IVA is for people who cannot pay their debts. If you cannot pay your debts when they fall due, you are insolvent and the law gives you two alternatives – bankruptcy or an IVA.

Question4: Are there any other options?
Answer: You could try to get all of your creditors to reschedule your debts, but this may be difficult if you have a lot of creditors. Some banks and building societies have debt counselors, and you could try speaking to them. Bear in mind that unlike an IVA, an informal arrangement offers no guarantees. One or more of your creditors could change their mind at a later date, or charge you higher rates of interest later if your circumstances improve. You may also take longer to finally clear your debt. Any debt management company will probably charge you a monthly fee for their services.

Question5: What are the advantages of an IVA?
Answer: We help you to calculate what you can afford and you make one payment by standing order each month. The payment amount is the same over the whole period unless your circumstances change. Once your IVA is approved, all of your creditors are legally bound by its terms, as long as you keep paying your agreed monthly sum. As soon as the agreed term of your Individual Voluntary Arrangement is over (usually after 5 years) you have no further obligations to your creditors. At this point you stop paying the monthly sum, and can start afresh. Any balance outstanding is written off. Your employment will probably not be affected. In fact, your employers will not even know about your IVA. Unlike bankruptcy, your details will not be advertised in the local press and you are not excluded from running a business.

Question6: What do I need to do?
Answer: When we have prepared the document for you and you are happy with its content, you need to sign it to confirm its accuracy before we are able to send it to your creditors. A meeting of creditors will then be convened to consider your proposal. You will not usually need to attend the meeting as voting is typically done by proxy. We will chair the meeting and you will need to be available on the telephone.

Question7: Will my home be safe?
Answer: It is extremely unlikely that you will be required to sell your home. It is a usual requirement of your creditors that you will have to attempt to obtain a re-mortgage to provide them with a lump sum.

Question8: What if creditors don’t agree?
Answer: At least 75% of votes (in value) must be to accept the proposal at the creditors meeting. If creditors vote not to accept the proposal you will then have the option of an informal arrangement or bankruptcy.

Question9: Do I have to pay any costs?
Answer: We won’t charge you any upfront fees. Any fees in connection with the preparation of the proposal and the administration of the arrangement are agreed by the creditors and are paid out of the contributions that you make on a monthly basis. Provided that you keep to the terms of the arrangement any balance outstanding at the end of it will be written off. In the unusual situation whereby creditors are repaid in full and there is still a surplus then you maybe required to pay some costs.