An IVA (Individual Voluntary Arrangement) is an agreement made with your creditors to pay off your debts over a set period of time, normally through an affordable monthly contribution for 5 years. It is a form of insolvency but it is different from bankruptcy. At the end of your 5 year period, you get a certificate of completion and all your debts are discharged.
Most debts can be included in an IVA, including store cards & credit cards, personal loans and income tax arrears. However, secured loans, hire purchase agreements, court fines & student loans cannot be included. The IVA proposal will be required to be agreed by 75% of your creditors who take part in the vote.
One of the big pluses of an IVA over bankruptcy is the fact that a house with equity is protected. The equity is the difference between the value of the property and any outstanding mortgages and secured loans. How any equity is dealt with should be agreed at the outset of your IVA. There are typically two options: either re-mortgage or find a 3rd party to loan 85% of the equity or, alternatively, extend the monthly payments for a further 12 months.
To discuss your options, call one of our experienced advisors now.