IVA debt help (Individual Voluntary Arrangements)

An IVA is a legally binding agreement between you and your unsecured creditors. It details a structured repayment plan which benefits both you and your creditors. Our debt advice is confidential.

If you are struggling to repay debt over £12,000, and have 3 or more creditors, you make smaller affordable repayments into the IVA which are then allocated to your unsecured creditors as agreed through the scheme.

An IVA (or Trust Deed in Scotland) is an alternative to bankruptcy (or sequestration in Scotland). You can

• write off debts that you cannot possibly repay 'within a reasonable time', and
• pay off remaining debts at a rate you can afford, over 5 years (in most cases), or 3 years for a Trust Deed (in Scotland).
• retain the money you need for essentials, like accommodation, food and utility bills.

Through an IVA (individual voluntary arrangement) you could also

• prevent legal action, including bankruptcy,
• have creditors agree to freeze interest and charges, and importantly
• keep possession of your home.

You could have up to 70% of the debt written off as part of the IVA arrangement, subject to creditor agreement and only on completion of the IVA.

You will still be expected to pay in a minimum monthly repayment of £200 or more, depending on your circumstances.

Anyone with 3 or more separate creditors, and a minimum debt level of £12,000 can apply for an IVA. You must be able to commit to a minimum monthly contribution of £200, depending on debt level, and be in full time employment.

All applications will be considered individually. Depending on your circumstances, we may offer alternative debt solutions.

Debt Advisory Line offers a specialist IVA service which is built around your circumstances and your needs. If you choose to start a IVA there will be a fee involved. Click here for information and an illustration of fees

Repaying debt over a longer period may increase the total amount to be repaid. Your ability to obtain credit will be affected in the short term and might be affected in the medium to long term.

Your credit rating will be affected for 6 years within an IVA. Your credit rating may have already been affected if you have missed or made late payments.

If you are a homeowner, it is very unlikely you'll lose your house. An IVA provides a better solution for homeowners than bankruptcy, which requires the release of equity and could force the sale or repossession of property.

Within an IVA agreement, a final year review of your property value may require you to release any property equity gains to re-pay your creditors.

The decision to accept or reject an IVA is made by a vote of your creditors at a creditors meeting that we will arrange. You need to get 75% acceptance by debt value at that meeting for the IVA to go ahead. If less than 75% by debt value vote to accept the IVA, the IVA will fail.

Depending on your circumstances, we may offer alternative debt solutions including bankruptcy and debt management plans.

During the set up period, we will contact your creditors and inform them that we are compiling a Statement Of Affairs ready to submit your application for an IVA.

Any contact you do receive you can refer to us:

• We will take care of all communication with your creditors.
• Once an IVA is agreed, creditors will not be able to take legal action against you.

You will still be expected to make a minimum monthly repayment of £200 or more. This all depends on your circumstances. Your monthly contribution is based on your entire household income and expenditure. Therefore it will be affordable for you.

You will be required to set up a standing order with your Insolvency Practitioner, which will be paid in to your IVA account and distributed to your creditors.

With Debt Advisory Line your insolvency practitioner will be our sister IVA company Mitchell Farrar Insolvency Practitioners LLP

If the IVA fails, then the creditors will be able to chase you for the remaining debt, as you will no longer have the protection afforded to you by the IVA. There is also the risk that creditors or the Insolvency Practitioner could petition for your bankruptcy.

Once we have reviewed your finances, we may recommend that an IVA is the best debt solution for you. Once you are within an IVA agreement, the pro's and con's of our IVA are:

Pro's

• We will negotiate with your creditors to reduce monthly repayments to an affordable level.
• Repay unsecured debts in 5 years (normally).
• Retain the money you need for monthly accommodation, food and utility bills.
• We will take care of all the necessary paperwork and creditor calls - if any creditor contacts you simply refer them to us.
• Legal protection from creditors, including bankruptcy petitions.
• Avoid losing your home.
• A dedicated case officer to manage your IVA for you.
• We'll try to freeze interest and charges.

Con's

• Your credit rating will be affected for 6 years in total.
• Homeowners may be required to release equity in their home.

We must put certain 'priority' debts before others. Debt write off applies to unsecured debts, and only on completion of an IVA.

Bankruptcy remains a viable option for some. We can assist you in the administration of your bankruptcy process. We may also recommend a debt management plan dependent on your circumstances.

Bankruptcy remains a viable option for some. We can assist you in the administration of your bankruptcy process.

Our Individual Voluntary Arrangements specialist service is provided by our sister IVA company Mitchell Farrar Insolvency Practitioners LLP.

Using the form at the top of this page, we can give you an instant confidential recommendation. Should you qualify for an IVA our advisor will need information about your assets and your monthly income and expenditure:

• A recent statement from each of your creditors showing balance, account number and the address.
• 3 months recent wages slips (consecutive).
• Valuation of property (if you own your own house)
• Details of any secured loans and a recent mortgage redemption statement
• Full details of all household income and expenditure.
• All unsecured creditors must be added to your IVA - whilst in an IVA you must not have any credit commitments other than your secured borrowings.

To read more about the choice of money management solutions available, the following websites may help you.

Insolvency Service information sheet

Credit Reference Agency

DEMSA (Debt Managers Standards Association)

FSA Money Made Clear