Does anyone know what an IVA is? I was asked this at work today by a colleague and I had no idea?

Answer 1

I am a Nominee for an Insolvency Practice. Please read the following.

IVA (Individual Voluntary Arrangement)

An IVA is a legal contract between you and your creditors. It is supervised by a Licensed Insolvency Practitioner.The purpose of which is to avoid bankruptcy.

The IVA enables you to cut your monthly payment to an affordable level and will clear your debts over a fixed period. IVA is private arrangement. Apart from you, Unity Debt Solutions and your creditors, nobody else will know.

You make one single manageable monthly payment, based on your budget, for 5 years. After that the remaining debt is written off, leaving you completely debt free.

Pros and cons of IVA

In most cases you only pay back a percentage of your debts. If you follow the IVA terms, you will be debt free in 60 months (5 years).


Up to 75% of your debt could be written off (dependant on your situation).

IVA is a legally binding agreement so no further interest or charges can be added by your creditors. Creditors can’t change their mind once the creditors meeting has passed. You gain protection against any court action (speak to an advisor).

Monthly payments will remain fixed unless you undergo changes in your income. Yearly reviews are conducted every 6 months as part of the agreement.

The individual voluntary arrangement is a private agreement. This means only your advisor and your creditors are aware. There is no publicity in your local papers.

You can open a regular bank account, without an overdraft facility and have no/fewer credit restrictions than if you go bankrupt.

You can safeguard your property, as the proposals can be made flexible to suit personal circumstances.

You can pay your debts off earlier than 60 months. Please call us on how this can be done.



What will happen to my house?

Will I lose my house? No. But if you have any equity in your house then this will be taken into account at some time during the arrangement (usually in years 3 to 5 when equity is at its greatest). If there is a joint owner of the property and this person is not party to the debts in the arrangement then their share of the equity does not have to be included in any offer to creditors.



Example: House worth £150,000. Mortgage at £100,000 so the equity is £50,000 (without any costs). If house is in joint ownership one half the equity could be used, therefore £25,000 would be taken into account. Please call our advisors for more information on your own situation.



If there is no equity in your home then the IVA will last 60 months (unless a variation by creditors is agreed).


Will my IVA propsal be accepted?

An IVA is the lesser of two evils for creditors. If you go bankrupt, the creditors will receive hardly any payment if nothing at all. Taking that into account, although your creditors will lose money in the IVA, the amount they receive is usually always higher.

Unity has a proposal success rate of over 90%. We will only put you forward for an IVA if your financial circumstances show you can afford the repayment and that you fully understand your commitments.

We are so confident in our service and success rate that if the IVA failed at the creditors' meeting, we will re-pay any funds paid by you.

We will endeavor to fix any problems that may come up whilst drafting your IVA.

We will provide regular updates on the progress of your IVA application

You will be allocated a case administrator who will deal with your case from start to finish. We are not a call centre and excell in giving a friendly reliable service to our customers.

The IVA success could be affected by the company that puts forward your IVA. Rest ussured that Unity have good relashionships with national accountants and others who vote on behalf of your creditors.

What is an IVA going to cost?

Insolvency Practitioners have different ways of charging for their services. Although IVAs are not free, it is the creditors who ultimately pay for the service.

We simply include the fees in your monthly payment plan.

Example: Customer has debt of £30,000. He is single and not a homeowner. He can afford to pay £300 each month. Over the IVA period he will pay back a total of £18,000. The IVA will ‘write off’ the balance of debt. Our fee is taken from the £18,000 paid before distributiong to creditors.

If your IVA doesn’t work for any reason, we will refund any fees taken from you* We will do our very best to give your IVA every chance of success.

Will an IVA effact my credit rating?



Your credit rating will be affected during the period you are in the IVA. You would find it hard to obtain further credit. The IVA however will not stop you from obtaining a mortgage.



Credit reference agencies hold a copy of your credit report. Once the IVA is complete we will provide a certificate proving the IVA has ended. You can then send this to Equifax and Experian who will then put a satisfied mark on your credit file.



Can I have a bank account when in an IVA?



You can open a bank account without an overdraft facility. If you have a loan or credit card with a bank and you also bank with them, we advise you to change banks. This reduces the risk of the bank taking your income after you are paid (if behind on a loan or in the overdraft).



Can I do an IVA with my partner?



A joint IVA can be done for both partners, married or common law.



Will an IVA stop creditors from hassling me?



Once the IVA has passed the meeting of creditors and is in place, the creditors can not contact you by law.

During the setup of your IVA you may have calls and letters from your creditors. We ask that all letters are sent to your case advisor who in turn can contact them directly for you.


If the IVA fails then creditors have the right to pursue you.

This information is accurate in accordence with the Insolvency Act 1986

Answer 2

There is an alternative to bankruptcy called an 'individual voluntary arrangement' (IVA). This is a formal arrangement through the county court to pay an agreed amount off your debts over a shorter period. This usually means paying a high monthly instalment over three to five years. The rest of the debts are written off. Some IVAs are set up on the basis of using a lump sum to make offers to the creditors rather than make monthly payments. Some IVAs are a mixture of both

Answer 3

Individual Voluntary Arrangement. Almost like bankruptcy but slightly less painful. Although, I've heard that some people would be better off going bankrupt.

Answer 4

Westley has just about summed it up .