what is an Iva?

Question

im in debt and have been looking for the light at the end of the tunnel and i keep seeing iva, what is it.sensible answers please

Answer 1

IVA means "Individual Voluntary Agreement". This is usually where you approach one of those debt management companies that advertise all the time on Sky TV and get them to put you on their books.

In return for a set-up fee and a monthly management fee, they then work out exactly what you can afford to pay each month, and then approach your creditors to work out a new agreement. Usually, the interest stops accruing from this point, and although the time taken to pay off the debt will increase, it is a system that usually works. If it doesn't though then the next step is almost always bankruptcy.

I would recommend you make a free appointment at your nearest Citizens Advice Bureaux and discuss the options available.

Answer 2

An IVA is a legal contract between you and your creditors, it is a legally binding arrangement supervised by a Licensed Insolvency Practitioner, the purpose of which is to enable you to reach a compromise with your creditors and avoid the consequences of bankruptcy.

The IVA enables you to cut your debts to an affordable level and clear them over a fixed period. The compromise should offer a larger repayment towards your debt than could otherwise be expected were you to be made bankrupt. You can even take out a fresh mortgage while in an IVA. What’s more, it is a totally private arrangement – nobody needs to know about it apart from you, your advisors and your creditors. An IVA ensures that your home is protected and your job is not at risk.

You make one single manageable monthly payment, based on your budget, for 3-5 years. After that the remaining debt is wiped clean, leaving you completely debt-free. This means that an IVA can write off up to 75% of your debts.

However, under the terms of the agreement you undertake to contribute as much as possible within your budget. So in reality, an IVA presents an opportunity for you to pay whatever as you can in a manageable way – a way you can afford.

Answer 3

I agree with the above in the first two answers, you have also to be aware that after one year your supervisor has a review of your financial situation and he may tell you can afford to pay more if you have had a pay rise or some other money coming in.This goes on every year for the 3 to 5 years you are in the IVA.

Answer 4

As above, but get free advice from CAB or a solicitor first and see if they can recommend an Insolvency Practitioner. the ones of tv tend to charge a lot more than normal, and are not always as good as the more reputable ones.

Answer 5

The best thing you can do is call a free charity such as Pay Plan, the guys at Debt Wave UK are also very helpful links provided below.