What is an IVA?
An IVA is a legally binding agreement between you and your creditors. It sets out a plan by which you will repay a fixed proportion of your debt over a set period of time

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Will all my debts be included?
An IVA will cover all your unsecured debts, including bank loans and overdrafts, credit cards, store cards, and even mobile phone bills and gas and electricity bills. An IVA won't include any secured debts such as a mortgage or motor finance secured on your car. Repayments on secured debts will be taken into consideration when working out a payment plan, ensuring you'll have sufficient funds to keep up repayments on priority debts like your mortgage.

 

Will interest and charges be frozen?
Yes. Once your IVA is confirmed, all interest and charges on debts covered by the IVA are frozen from that date. This means you will know exactly how much you have to repay to clear your debts.

Other than my wages, will anything else be taken into consideration when calculating how much I can afford to pay each month?

You will need to declare other earnings such as overtime and bonuses, plus you should also declare any savings you have.

 

Will my creditors stop calling and writing to me?
Yes. Your creditors will be legally bound by your IVA, and once the arrangement is confirmed, they will cease to request payments from you. Your creditors will communicate with you via your nominated IP.

 

Why do creditors agree to IVA's?
An IVA gives creditors a detailed plan of what proportion of any outstanding debt they will receive. What if a creditor won't agree to in IVA? If those creditors who are owed at least three quarters of your debt agree to an IVA, other creditors will become legally bound by the agreement.

 

I am a home owner. Will I have to sell my home?
No. You can continue to live in your home so long as you keep up repayments on your mortgage and any other loans secured against it. If your home is worth more than the value of the mortgages and loans secured against it, then you may be asked to release some or all of this equity towards your IVA contributions.

 

Can I keep my car?
Yes. If you use your car for commuting to work, then as long as it's not considered a luxury vehicle, you will be able to keep it.

 

Will there be a public declaration of my IVA?
No. You do not need to worry about friends, family or neighbours discovering you've entered into an IVA. Details of individuals currently on an IVA are released only to creditors and insolvency firms, and are filed on a specialist insolvency website.

 

Will an IVA affect my credit rating?
An IVA will affect your credit rating, but it's very likely that your credit rating will already be impaired by missed or late payments. You should not apply for further credit while your IVA remains in place.

 

How long will my IVA remain in place?
Most IVA's remain in place for 60 months, however the exact duration depends on individual circumstances. At the end of your IVA period, all outstanding debts will be written off by your creditors.

 

What happens if I don't keep up payments under an IVA?
If you fail to comply with the terms of your IVA, it could result in bankruptcy. You should contact your IP right away if you are unable to maintain payments.