IVA Specialists UK

To discover more about how to manage your debt and to receive free debt advice, you can visit www.moneyhelper.org.uk or read about options for paying off your debt.

What debts aren’t covered in a Individual Voluntary Arrangement?

Not all debts can be included in a IVA, some types of debt that won’t be included are:

• Mortgages
• Debts incurred through fines
• Student loans
• Court fines
• Social fund fines
• Hire purchase agreements
• Child support arrears

Living with an Individual Voluntary Arrangement Plan

In an IVA, your monthly debt repayments will be vastly reduced. This will, hopefully, free up more of your monthly income and allow you some financial respite from your current debts.

In most instances, having an IVA won’t affect your current employment.  Though it’s always good to read over your contract before going forward.

Your home will be considered when applying for your IVA.  Under the arrangement, it’s unlikely you will be made to sell your home. However, the IP will review any equity in your home, and you’ll probably be required to remortgage and release any available equity.

Mortgage

Being in an IVA will make it difficult to get a mortgage. In most instances, it’s often better to wait until the IVA is no longer recorded on your credit file before applying. Though there are specialist lenders who will be more likely to consider your offer, you probably won’t get access to the best rates as a result of your credit score.

Renting

In most instances, being in an IVA shouldn’t affect your current renting contract, though we always advise checking contracts for any relevant clauses. As your credit rating will be affected by an IVA, this may become a concern for future landlords when running a credit check. These concerns can be offset if you are either renting with another person or can find someone to become your guarantor during the application process. In these situations, we always encourage honesty with your prospective landlord, as they may be more understanding if given the full context.

Can a Individual Voluntary Arrangement protect me against bailiffs?

If you have any outstanding court actions including the use of a bailiff, they will be stopped once an IVA has been put in place. This means that bailiffs will no longer be able to attempt collections to repay any debts included in an IVA.

“It’s made a big difference to me and how I live.“

— Helen, Aberdeenshire *
Read Helen’s story…

How long does an IVA last?

An Individual Voluntary Arrangement can last 5 to 6 years. Your Insolvency Practitioner (IP) will check that all payments have been made on time and in full, and once confirmed, you will receive an IVA completion certificate. You won’t have to notify creditors, but we do recommend checking the public insolvency register and querying it if you haven’t been removed 3 months after completion.

Can you pay off your Individual Voluntary Arrangement early?

If your circumstance change or you receive a large windfall whilst completing your IVA, you may be able to settle early.

The offer will have to be made by your Insolvency Practitioner (IP) who will write up a proposal and put it to your creditors. This is known as Variation, and for it to be agreed, at least 75% of creditors that respond have to say yes to it.  

What’s the difference between an IVA and a DMP?

Both an Individual Voluntary Arrangement (IVA) and a Debt Management Plan (DMP) are solutions for those who are struggling with unmanageable debt, both involve making reduced, affordable monthly payments to your creditors as part of an agreed plan.

The biggest difference between the two solutions is that an IVA is legally binding and a DMP is not. With an IVA, once your creditors have agreed to the terms, they won’t be able to take legal action against you (such as petitioning to make you bankrupt, or other court action). They will also be unable to contact you directly – they’ll need to communicate through the licensed Insolvency Practitioner (IP) who is dealing with your case. IVAs also allow you to write off some of your debt, unlike DMPs.

DMPs are not legally binding, so your creditors can still take action against you if you do not keep up with your monthly plan repayments. They are also still free to contact you, however, if you’re using an FCA-regulated Debt Management company such as MoneyPlus Advice, we’ll be sure to help with any creditor contact you receive.

Find more about a DMP

Do creditors have to accept Individual Voluntary Arrangements?

Once an IVA proposal has been drawn up, your insolvency practitioner will contact all of your creditors. Creditors don’t have to accept the proposal but an IVA will go ahead providing 75% of the creditors who responded are happy with the proposal.