Thank you for visiting iva.co.uk , an IVA Community putting you in touch with people in IVAs and licenced insolvency practitioners that set up and supervise IVAs for people all over the UK.
Set out below is an example of how an IVA could work.
Before the IVA:
Jerry had unsecured debts totalling £19,354.28 over 10 different creditors. His contractual payments per month were £735 which he simply could not afford:
Monthly budget summary:
- Income: £1,872
- Expenses: £1,724
- Available to pay towards debts: £148
So every month Jerry was facing a shortfall of £587 which often resulted in further borrowing and the debt escalating ever higher.
All possible solutions were reviewed looking at the risks and benefits of each.
This debt could have been paid through an informal debt management plan over a longer term, but after just 2 months creditors accepted an IVA with reduced monthly payments over a fixed term as follows:
- Paying £148 per month for 60 months giving a total paid into the IVA of £8,880.
- The remaining £10,474.28 is written off at the end of the IVA.
Not all of the money paid into the IVA goes to the creditors. There are fees involved in the set up and supervision of an IVA which are all taken from the normal monthly payments made into the IVA as agreed with creditors at the start.
If you would like more information about IVA's, please contact us on the number below.