An individual voluntary arrangement (IVA) is a debt solution which is only available to people who live in England, Wales & N. Ireland.
An IVA shouldn’t be entered into lightly and is something people should educate themselves on before signing.
Wrongly entering an IVA can have serious consequences, financial and personally.
Debt Level: There isn’t really a minimum amount of debt to enter an IVA however anything less than 8k could mean another solution is more suitable.
Who’s Suitable: To enter an IVA a debtor must be working and have a disposable income so they can afford the monthly contributions.It is possible to have a third party make the payment, however this isn’t ideal.
How An IVA Works: Once a debt advice charity have determined an IVA is the best debt solution an insolvency practitioner (IP) will be needed.
The job of the insolvency practitioner is manage the case, this includes collecting the maximum amount for creditors and monitoring debtors finances.
The insolvency practitioner puts forward the IVA proposal, which the creditors can vote for or against.
So long as 75% of the creditors who vote accept the proposal the IVA will begin and it’s cannot be changed by either party.
The monthly contribution will be made to the insolvency practitioner who will collect all money and disperse it at the end of the solution.
Missed IVA Payments
One or two missed payments over the period of the IVA is unlikely to cause it to fail, however if it’s a regular occurrence it could be failed.
The creditors are likely to seek to have the person declared bankrupt if the IVA is cancelled because of failed payments.
Where to Get Debt Advice
It’s always best to make sure the debt advice organisation is free, reputable and has all the necessary accreditations.
Check they have a consumer credit licence and reviews from other who have used them are also good.