Debt's over £15,000.
Debt's under £15,000.
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Making the right choice.

Individual Voluntary Arrangement (IVA)


An IVA is a legally binding agreement between you and the people you owe money to. It gives you the opportunity to become debt free.


Under the rules and regulations laid down by the Insolvency Act 1986, the Arrangement legally binds all your creditors.  The terms of the proposal are tailored to your own personal circumstances, making the Arrangement comfortable and affordable for you.


If the creditors accept your proposal, your IVA will be implemented.


What does an IVA cost?


An IVA is provided to you free of charge. There are no upfront fees and the only money you pay is your monthly payment. The money needed to cover the cost is paid by your creditors from the contributions they are paid.


Different fees apply to different cases.  They will be agreed with you and your creditors at a fixed amount at the outset and will be deducted from the payments you make to the arrangement, over the lifetime of your case.


Who is suitable for an IVA?


If you owe more that £15,000 to three or more creditors and you are in employment, an IVA may well be a positive solution for you.  Rest assured, if an IVA is not right for you, we will not propose it.


Why would an IVA be good for me?


An IVA is beneficial when creditors are applying too much pressure or when it would take you an unacceptably long time to repay your debts.


People who have benefitted from an IVA often say that one of the best things is that they know exactly when they will finish repaying their debts and because the payment term is fixed. As with so many things, people can cope better if they know they can see the light at the end of the tunnel.



Other advantages include:


· Your monthly payments reduced to a level you can afford.

· A fixed period of payment.    

· All creditors are legally bound by the Arrangement so that they are prevented from taking legal action and all contact from them will stop.

· All interest and charges stopped.

· A proportion of your debt is written off.

· No notification to your employer.

· No public notices.

· A private and confidential agreement.




Why would my creditors accept an IVA?


We will only propose and IVA debt solution if we believe it is the right solution for you and if we believe it has a very strong chance of being approved.  Our experience means we know what makes a good IVA possible and tailored to suit your individual circumstances.


An IVA can produce a better return for your creditors than a bankruptcy and your proposal should demonstrate this.  Apart from demonstrating a better return than bankruptcy, your creditors benefit from knowing that the IVA will be monitored and that your finances will be subjected to a disciplined process.



How much debt will be written off?


Every IVA is different.  There are no fixed rules regarding the written off

amount.  How much, in your case, will depend on how much you owe and how much you can afford to repay each month after your individual

household expenses.



How much do I have to pay?


Normally creditors expect your IVA proposal to allow you to cover all your essential living costs, leaving only your surplus income to contribute to your IVA.



Can I do an IVA with my partner (or Spouse)?


Yes.  If your partner has debts they cannot afford to pay, then this can be taken into account and a “linked” proposal made to all of your combined creditors.



Who monitors my IVA?


An IVA can only be set up with the help of a Licensed Insolvency Practitioner, known as an IP.  An IP advises and forms your proposal to take to your creditors and has, at all times, to take your interests and those of your creditors into account.  Then, once your IVA is accepted, the IP supervises it for its duration.



Will I have to sell my house?


A major benefit of and IVA is that your home is protected. In bankruptcy and asset, especially a house, may be sold to repay some of the money owed to your creditors.  This is almost always avoided in an IVA.  Instead, if you have some equity in your home, this may well need to be released at some point, just before the end of the IVA by way of a re-mortgage; however, at this stage your IVA contributions may come to an end.



Will my job be affected?


No, not unless you have signed terms and conditions of employment which state otherwise.  An IVA is an alternative for many people whose job would be a risk if they were made bankrupt.  This would include, but is not limited to, accountants, solicitors, bank workers, police officers and members of the armed forces.  Unlike bankruptcy, which is published in the local paper and the London Gazette and IVA is a private and confidential arrangement with your creditors.  If you have a partner or are married, it is necessary to tell them about the IVA process you are entering into.



Will I be able to get credit again?


You probably feel you won’t ever want credit again at the moment.

However, lenders base their decisions on a credit rating based on your credit history.  In most circumstances your credit rating will already have suffered due to your debt problem.  During your IVA you should not attempt to obtain credit.  Your IVA will remain on your credit history for twelve months following completion of your IVA.   Experience shows that people are often able to obtain credit once their debt problem has been dealt with.




What happens if I can’t pay my agreed monthly payment?


It is essential that you maintain your payments.  If you start to build up arrears of two months or more, your supervising IP may be required to fail your IVA leading to Bankruptcy.  However, if something unexpected happens beyond your control, it is possible to arrange for a payment holiday so that your can deal with the problem and get back on track.

Should your situation change during the IVA to the extent that you cannot maintain your IVA as agreed, it is possible to propose what is called a ‘variation’ to your creditors.



I am self employed. Can I do an IVA?


Yes. An IVA was originally intended to assist individuals who traded as a business in their own name.  If you are self employed you will need to provide copies of accounts to show evidence of your income.



Are there any disadvantages?


An IVA needs commitment and a desire to see it through.

If you own your own home, it is likely you will have to release some of the equity near the end of your IVA.


If you earn extra income, such as overtime or bonuses, you will have to contribute a part of this to your arrangement.


As you are considering an IVA then you are obviously facing financial difficulties which need a solution.  In many cases the benefits of an IVA far outweigh other alternatives that are available to you.


Can I do and IVA if legal proceedings are threatened?

An individual who intends to propose an IVA to their creditors may apply to the Court for an interim order which, if granted, halts bankruptcy and other legal proceedings whilst the order is in force.




DMP (Debt Management Plan)


Won’t you just consolidate my debt into one expensive loan?

No. Debt management companies offer repayment programmes that are NOT consolidation loans. They help you work out an affordable monthly repayment figure based on your income and expenditure commitments, and administer and distribute payments to your creditors from that amount each month.


Will you deal with all of my debt?

No. We will deal with all of your unsecured credit and non-priority debts. This includes personal loans, credit cards, overdrafts, catalogue debts, etc.

Other types of debts must be given priority because of the serious consequences of not maintaining regular payments. You must continue to make these payments yourself. Examples include your rent or mortgage, any loan secured against your property, hire purchase agreements, council tax and utilities such as gas, electricity and water.

When we assess your financial situation, we make suitable allowances for you to be able to afford your priority debts and your day-to-day living costs before we calculate how much you can afford to pay towards your other creditors.


Will I end up paying for longer?

Because we negotiate lower monthly repayments on your behalf, your debt will take longer to repay - however, the repayments will be affordable.

Our programme is only offered to clients who, because of their financial circumstances, cannot afford to make the minimum payments required by their creditors each month. Our service allows you to make an affordable payment, every month, towards reducing each of your debts - instead of continuing to struggle, having to miss payments and incurring additional charges.

The programme is focused on you and your ability to pay, and if your circumstances change, then we can revise your programme accordingly.


Can I be sure my creditors will accept the arrangement?

We’re in daily contact with creditors and have built up excellent working relationships with them. Many years of experience have shown that most creditors welcome a reasonable payment proposal that’s agreeable to both parties.

Whilst we are able to negotiate reduced payment terms and the freezing or reduction of interest on your behalf, creditors are not obliged to freeze or reduce interest or to accept reduced repayment arrangements - and unless they do, repaying the same debt over a longer period of time will result in an increase in the total amount you have to repay.


Can belonging to a Debt Management Programme damage my credit history?

Joining our Debt Management Programme won’t directly affect your credit rating. However, if you are experiencing financial difficulty your credit rating may have already been affected.

Any of your creditors may issue a default notice to register the fact that your original agreement with them has not been maintained, and the credit reference agencies provide information about your full financial history to other potential lenders.


If I want to leave the programme will I be charged?

No. There is no charge for leaving our Debt Management Programme, but we do ask for two weeks’ written notice. This gives us time to inform your creditors and ensure a smooth transition back to you. Your initial payment covers the cost of setting up our Debt Management Programme.

Also, in case you decide to change your mind after our agreement has started, we offer you a cooling-off period of 14 working days.

How long does the Plan last?

That will be determined by how much is owed and the amount you can realistically afford to pay your creditors each month.

You’ll be given an indication of the likely length of the plan at the outset, but it will always be dependent on your creditors freezing interest and other charges on your accounts and your circumstances not changing.





You should think carefully before you take out any loan or additional mortgage that is secure in whole or part on your property.  Your home would be at risk if you cannot keep up your payments


Remortgaging is the replacement of an existing mortgage with a new one.

The FSA regulates most mortgage sales.

Regulated mortgage information is issued in a standard format which makes it easier for you to compare different products and lenders.


Loan consolidation means combining two or more existing loans into one consolidated loan.

This would normally extend the repayment period of the original loans but reduce your monthly bill.


You should be aware that consolidating your debts is usually only suitable if all of your existing debts are paid off with the new loan.


If you consolidate your debt with a new loan and then continue to use your credit cards you could find yourself in a worse situation than before.







Some information about bankruptcy.  For more detailed information speak to your local County Court.

The rules relating to bankruptcy are complex and need careful consideration.


Bankruptcy is often considered ‘the last resort’ for people with serious

Debt problems.


There are two ways of becoming bankrupt. The first is to wait for one of your creditors to issue a bankruptcy petition to Court. Alternatively, you can petition for your own bankruptcy which currently costs £475.00 (December 2006).


The current standard time before discharge of a bankruptcy order is twelve months although in some cases it can be longer.


You may have to make payments via an Income Payments Agreement for up to three years of between half and two thirds of your disposable income.


When bankrupt you must not obtain credit of £500 or more from any person without first disclosing the fact that you are bankrupt.


Details of a bankruptcy order are published in local newspapers and in the London Gazette.  Your creditors will be informed and you may be obliged to inform your employer as well as your landlord.


In some professions you may well run the risk of losing your job.








The person or company to whom you owe money



An individual who owes money to one of more creditors



The most common meaning of ‘insolvent’ is being unable to pay your debts as and when they are due to be paid.  Alternatively, if your assets are worth less than your debts, this also means you are insolvent.



When creditors are paid they are all treated equally.  The dividend is the share of the total funds available that they receive.


Disposable income

The amount of money left and the end of the month once all essential expenditure has been deducted from your net take home pay and before any unsecured debt repayments have been made.


Statutory Demand

A formal notice requiring payment of a debt exceeding £750 within 21 days.  In default of this demand, bankruptcy proceedings may be commenced without further notice.


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