What Is An IVA Service (Individual Voluntary Arrangement)?
An IVA is a formal financial solution which enables people to have their debts consolidated (monthly bills) for a period of what is usually 60 months (unless there is equity in the property in which case it may be extended for one year), after such a time, the remainder of the debt is written off, an IVA is more than debt advice, it is an IVA service which can enable people to become debt free with a reduced commitment.
What Are “IVA Services”?
The Term ‘IVA service’ refers to the services rendered by a credit counseling company which offers an IVA (individual voluntary arrangement), if you choose to apply for an IVA you will have a no obligation debt assessment to see if the IVA is suitable for you, if it is the appointed representative will then draft up the documents to set up an IVA (only people in England and Wales and Northern Ireland qualify for an IVA, if you are a Scottish resident you will need to look at our ‘Trust deeds’ page).
There are also certain debt charity companies which offer similar services, however we charge no external fees to yourself, so either way you can choose to use an IVA company or a debt charity .
We are licensed insolvency practitioners which have the expertise to help people in any financial situation facing any type of financial difficulty.
How Is An IVA Service Differ To A Debt Management Service?
A Debt management plan is a more informal debt solution which is designed for smaller debts, an IVA is a service (debt solution) which is more protective, has more legal power and features, such as the legal injunction known as the ‘interim order’, plus creditors are not allowed to bother you when you are in an IVA, whereas in a debt management plan if the plan is disrupted it is likely you will start to receive correspondence again (post, calls and emails and text messages).
How Does The IVA Service Change Things – How Does This Look In Practice?
Example Savings With An IVA Service:
Before An IVA: Mark is currently paying £850 on his unsecured debts, this includes loans, credit cards, and catalogue debt, this is an unsustainable amount of money each month to be paying out towards £14,500 of unsecured personal liabilities.
On An IVA: Mark is currently paying £250 towards his monthly debts in a legally protected debt arrangement which is covered by what is known as an ‘interim order’ which is a legal injunction which protects the person in debt from creditor and bailiff hassle and further legal action, not only is Mark paying a reduced amount per month, he is also in a position to write off up to 90% of the remaining debt, the insolvency practitioner will manage all contact with creditors and lenders during the course of the entire individual voluntary arrangement.
How Is The IVA Service Setup?
There is an initial free debt consultation where all the debts are taken into account, the situation as a whole given a debt assessment to determine whether or not the IVA would be suitable to help the person struggling with debt, the IVA is set up within approximately 3-4 weeks in most cases the debt relief can be seen as soon as the service is setup.
As soon as the IVA scheme is agreed and underway the appointed representative manages debts on behalf of the debtor so they don’t have to communicate directly with any creditors.
Also once the initial debt assessment is complete the debt adviser can give information on which debt solutions are available and what would be most appropriate given your personal circumstances.
The new reduced repayments are based on what you can afford to pay, the IVA company will work to get this agreed through the courts and also agreed with the creditors by drawing up an IVA proposal with all debt information included and the suggested repayment sum.
Once the IVA service is agreed and signed off, the voluntary arrangement begins. Borrowing money or applying for additional loans or credit of any type is avoided for the full term of the IVA service.
Benefits Of Using An IVA Service At-A-Glance:
Pay a reduced amount towards your debts from the very beginning
Options for paying different amounts if personal circumstances change
Unsecured creditors unable to hassle
Frozen interest and charges for the life of the IVA
Any remaining debt is written off at the end of the IVA
Dealing with debt is no longer the responsibility of the debtor, they only need to pay the agreed, affordable monthly payment
No sale of the property will be necessary as the IVA makes provision for repaying debts without this as a measure
Any debts the creditors agree to can be included, including rent arrears (but creditor agreement is a must)
Its possible to enter into an IVA if you’re on universal credit and/or other benefits, the minimum requirement is usually £100 of disposable income monthly the enter into an IVA.
Can Joint Debts Be Included In An IVA Service?
Yes. Joint debts can be placed in what is known as a joint IVA which is for couples’ who face debt and wish to write off debt and become debt free together.
into an IVA.
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