Starting an IVA How an individual voluntary arrangement is set up
Who Can Use An Individual Voluntary Arrangement (IVA)?
Anyone can consider an IVA to solve their debt problem. IVAs can be set up for anyone regardless of their profession. Your ability to undertake an IVA is not defined by your job but you must be unable to repay your debts.
Who Is Eligible For An IVA?
It will depend on your personal circumstances. Normally your personal debts must be above £8,000 and you should have 3 or more different creditors. You must also be able to offer a reasonable monthly payment to your creditors. This will vary depending on the debt. However, as a guide, you will usually need to be able to afford approximately £100/mth.
Which Debts Can Be Included?
Normally any unsecured debts can be included within an IVA. These include but are not limited to:
- Store cards
- Credit cards
- Personal loans
- Outstanding balances after home or vehicle repossession
- Business loans for which you are personally liable
- Inland Revenue
- Council Tax Arrears
Which Debts Can't Be Included?
Some debts cannot be included within an IVA. These will normally involve secured debts, such as a vehicle HP or Mortgage arrears. Other debts such as rent, CSA, student loans and fines (such as parking offences) will normally have to be paid and provision for the repayment of these debts will be made separately.
Contacting an Insolvency Practitioner (IP)
You cannot propose an IVA to your creditors by yourself. By law, you will need the help of an Insolvency Practitioner or IP (see Glossary). There are a number of reputable Insolvency Practitioners.
Will I Have To Pay For This Service?
Insolvency Practitioners do not work for free. However, this does not mean that you will be facing a bill if you want to undertake an IVA. Many Insolvency Practitioners will take their fees from the money that you agree you can afford to pay each month. You will therefore not have to pay more than your agreed monthly payment.
Different Insolvency Practitioners have different ways of charging fees so make sure you ask how this will be done and shop around if the need be. Some Debt Management companies and IPs will offer a free home consultation. Take advantage of this offer if you can.