1. How does an IVA work?
2. What are the effects of an IVA?
3. Do all my creditors have to agree to an IVA?
4. How much do I have to pay?
5. What if I am unable to make my payments?
6. What happens at the end of the agreement?
7. Why would my creditors accept an IVA?
8. How much does an IVA cost?
9. What are the effects of an IVA on my home?
10. Do Freeman Jones belong to a professional body?
How does an IVA work?
An Individual Voluntary Arrangement (IVA) could be your best solution if you have a substantial amount of unsecured debt, usually over £15,000.
As a licensed Insolvency Practitioner we can negotiate a legally binding agreement between you and your creditors.
You agree to make an agreed monthly payment for a fixed period of time, usually 5 years, and best of all at the end of that period the remaining balance is written off.
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What are the effects of an IVA?
As long as you continue to pay the agreed amount each month you’ll be protected from any further action being taken against you by your creditors. All interest charges are frozen. Your credit rating will not be as seriously affected as it would in bankruptcy.
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Do all my creditors have to agree to 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.
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How much do I have to pay?
We will advise you fully about the amount that you should propose to pay into your IVA. In principle, however, the payment will be based on the amount you have left over after we’ve made an allowance for all the day to day living expenses of you and your family. Your creditors will usually require that these payments are maintained for five years.
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What if I am unable to make my payments?
We will be in regular contact with you to make sure you’re able to meet your monthly payments. If you do run into financial problems, we will try to renegotiate the terms of the agreement with your creditors. If you find that you are unable to meet your payments, this can cause your IVA to fail and can even lead to bankruptcy.
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What happens at the end of the agreement?
As long as the terms of the proposals have been fully performed, the creditors included in the arrangement will have
no further claim against you and the balance of any unpaid debts is written off.
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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.
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How much does an IVA cost?
All the costs associated with your IVA are included in the payments you make in to it.
You don’t pay anything extra.
At Freeman Jones , we are committed to being totally clear, open and fair to both you and your creditors about our fees and any other costs that may be incurred. We do not pay or receive any undisclosed fees or commission.
We will fully inform you of our proposed fees before you enter into an IVA.
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What are the effects of an IVA on my home?
One of the main advantages of an IVA over bankruptcy is that provided the conditions of the arrangement are met, the family home is safe from repossession. As a homeowner, it may be necessary to release some ofthe equity in your property to help reduce the outstanding balance.
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top of page Do Freeman Jones belong to a professional body?
Our insolvency practitioners are licensed by either the Insolvency Service (part of the Department of Trade and Industry) or the Institute of Chartered Accountants in England and Wales (ICAEW), and are members of the Association of Business Recovery Professionals (known as R3). All licensing and professional bodies provide technical, professional and ethical guidelines that have to be followed carefully.
More information is available from the Insolvency Service website at www.insolvency.gov.uk
Call free on: 0800 074 4110
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Subject to eligibility and acceptance. Debt write off applies only on completion of an IVA, alternative solutions may be offered. Initial advice is free, fees payable for continuing services. Your ability to obtain credit will be affected for 6 years. Homeowners may be required to release the equity in their property. Calls may be recorded.
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