What is an IVA?
An IVA is a legally binding arrangement supervised by a Licensed Insolvency Practitioner, the purpose of which is to enable an individual, sole trader or Partner (“the Debtor”) to reach a compromise with his creditors and avoid the consequences of bankruptcy.

Is an IVA the same as Bankruptcy?
No they are similar except with an IVA the individual can have more control over the level of debt repayment they undertake once an IVA has been agreed. Although the period for which an IVA could be in force can be longer than that of bankruptcy, the resulting issues can be less severe.

Who can benefit from an IVA
An IVA is available to all individuals, Sole Traders and Partners who are experiencing creditor pressure and it is used particularly by those who own their own property and wish to avoid the possibility of losing it in the event they were made bankrupt.

Will I loose my house?
No, But should you have equity in your house, savings or other assets then these will be taken into account when making an offer to creditors.

Am I safe from bankruptcy if an IVA is in place?
If the IVA fails as a consequence of the Debtor not meeting his obligations under it, it likely that the Debtor will be made bankrupt at this time.

How long does the IVA last?
Where contributions from income are being made, IVA’s are generally expected to be for a period longer than that in bankruptcy, i.e. 5 years as opposed to 3 years. The 5-year period is often required by creditors as a bargain for allowing the Debtor to avoid the consequences of bankruptcy.

Which debts can be included in an IVA?
Normally any unsecured debts can be included within an IVA. This rules out mortgage and other secured loan repayments and any items on Hire Purchase will be repossessed if repayments can't be made.

Will I have to pay fees?
Although fees are charged for both setting up and supervising the IVA, they are taken out of monthly payments you have agreed to pay into the IVA. In other words your creditors bear the cost of an IVA.

Can I obtain an IVA if a bankruptcy order has been made against me?
Yes. It is possible to annul a bankruptcy and enter into an IVA if it is more appropriate

Can one individual creditor refuse to accept an IVA?
They can vote against it, but not refuse to accept it. If more that 75% of your creditors in value approve the IVA then any dissenting creditors are bound by it.

Will the IVA stop my creditors from taking further action against me?
Once the IVA is in place, you are protected from further recovery action by your creditors, so long as you keep up the agreed payments.

Can I cancel the IVA once it is set up?
An IVA is a legal process and, once it is set up, you cannot cancel it if you change your mind. However it will fail if you do not comply with the terms and then your creditors bring legal proceedings against you.

What happens if the IVA is not approved?
You will have to come to an informal arrangement with you creditors (or use the services of a debt management company) to repay your debts or declare yourself bankrupt. It is unlikely that we would make an IVA proposal without high confidence of acceptance.

How are debts with joint liability treated with respect to an IVA, when only of the debtors is applying for the IVA?
It is at the discretion of the creditors and will depend upon individual circumstances. If it is only a small part of the total debt, then there is more chance of acceptance. If it is larger and more recent debt, then it is less likely to be allowed to be included in the IVA.

Who pays the fee for setting up the IVA in the case of its rejection?
If we proposed an IVA which is rejected, then we bear the cost.

How much will I have to pay into the IVA?
Monthly payments depend upon your disposable income rather than size of debt. This is what you are left with after reasonable monthly living expenses from your monthly income.

Can I keep using my credit cards or take out a new loan during an IVA?
No, During the IVA, you will not be able to use store or credit cards.

What if I unexpectedly come into some money during the IVA?
Your IVA will usually include a 'windfall' clause that will require you to pay the money into your arrangement.

I'm considering an IVA, but my creditors are taking me to court. Can this be stopped?
When the Insolvency Practitioner has prepared your proposal, an application can be made to the county court for an Interim Order. This stops your creditors from starting bankruptcy proceedings against you. This also prevents other enforcement action without the court's permission whilst the Interim Order is in force. This can be done in a week.

Will an IVA affect my ability to obtain further credit?
Until an IVA is completed it is a fundamental requirement that the debtor does not further credit.

Will I be able to hold a position of Company Director?
Unlike Bankruptcy an IVA does not impose restrictions on your ability to hold positions such as a Company Director or a JP.

Can I arrange an IVA directly with my creditors?
No.