IVA FAQ's
Here are some frequesntly asked questions we get about IVA and Individual Voluntary Arrangements.
What is an IVA?
An IVA or Individual Voluntary Arrangement, is an agreement between your creditors(people you owe money too) and yourself. It contracts you into paying an agreed monthly sum for (normally) 5 years. This monthly sum is then divided between your creditors until the agreed amount has been paid, some of your debt will be written off.
What type of people get IVA’s?
People who have got themselves into debt they can’t pay back. This makes you insolvent and the law allows you tow options – bankruptcy and IVA.
How much of my debt will I have to pay back?
This depends on your financial circumstances, income and monthly expenditure. We will work out what you can realistically afford to pay, a standing order authority will then be set up and your first payment will be made before the creditors meeting.
What other options are available?
Get your creditors to reschedule your debt; this could be a pain if you have lots of creditors. If you debt is with a bank or building society, they might have debt counsellors – speak to them. Setting up an informal agreement is not a legal document, your creditors could call in there debt at any time – making you bankrupt.
What will I have to pay?
Our staff will help you help you calculate what monthly payment you can afford to make, you then make one payment to a client account by standing order. This amount is the same through out the term of the agreement. If your circumstances change and you can afford to pay more then you can – you will be reviewed once a year.
Will creditors ask for more money at times?
If your IVA is approved, all your creditors are bound legally to its terms of payment and should not contact you at all through this period.
When will I be debt free?
Once the agreed term of your Individual Voluntary Arrangement is complete, normally 5 years, you stop paying the monthly sum and make a fresh start, debt fee
What about my job?
Employment should not be affected. Your employers will not know about your IVA unless you choose to tell them.
Will my IVA be advertised in the local press?
Unlike bankruptcy, an IVA is not advertised in the local press and does not exclude you from running a business or lead to many professions terminating your employment
What do I need to do?
Firstly speak to us sooner rather than later! Before your IVA proposal is put to creditors you need to sign it as a "Statement of Truth". You do not need a solicitor for this. We prepare all documentation for you and we contact your creditors on your behalf (if necessary we will make an application on your behalf to your local County Court for an ‘Interim Order’).
A meeting of creditors will then consider your proposal. You will not usually be required to attend – usually most creditors do not attend themselves, voting by proxy instead. Even if creditors do attend, the meeting usually only lasts for 15-20 minutes. Someone from Delete Debt will chair the meeting, and you need to be available by phone during this period. IVA process
Will my home be safe?
It is not usual to have to sell your property when in an IVA. If you do own your home, you will need to take reasonable measures at the end of your IVA to make any equity available to your creditors (usually by remortgaging). This requirement is also true for bankruptcy, except with bankruptcy you do normally have to sell your home.
What if my creditors don't agree?
Over 75% of votes (in value) at your creditor meeting must be in favour of your IVA proposal. Creditors can suggest modifications to your proposal and you can choose whether to accept them or not. However if this does happen, you will still have the option of an informal arrangement with your creditors, or of bankruptcy.
Do I have to pay any costs?
We will not increase your current debt, our fees are taken from the agreed payments of your IVA. Keeping to you IVA agreement for its term of 5 years, any debt you can’t afford to pay will be written off. Basically you only pay back what you can afford too, which is agreed to by your creditors under the IVA.