The IVA - You Only Pay What You Can Afford

Imagine the relief of a short confidential discussion with a friendly financial consultant that resulted in you being told you qualified for an IVA (Individual Voluntary Agreement). It would mean less debt and lower monthly repayments.

Contact us now it takes just 5 minutes to see how an IVA could help you.

About IVAs

An arrangement is prepared, negotiated and administered for you to voluntarily repay your creditors. This may be done by using your spare income, a lump sum or other assets that you own.

If you have surplus income after meeting your basic personal and household expenses or have any assets that can be used to pay your creditors or have access to a lump sum, for example from a relative, you may then consider entering into an Individual Voluntary Arrangement (IVA). Doing this will protect you from recovery action that creditors may take, and will usually result in creditors writing off part of your debt. A proposal for an IVA will only be approved where enough creditors agree.

A Clients Experience with an IVA

Mr Green had been struggling with his Debt Management plan for some time when he approached us. His total debts were £16,399 with an informal arrangement to pay them off in just over 8 years at a rate of £491.97 per month. The light at the end of the tunnel was a long way off and the monthly payment still too high.

As always the people at Smooth simply dealt with this debt. Creditors agreed and IVA and Mr Green’s monthly payment dropped to £211 per month for just 5 years after which he will write off 23% of his debt (£3,739). What a result, now he can manage his monthly repayments and clearly see his way out off the debt that was strangling him

*This is an example and is subject to personal circumstances

Pros

• Creditors who vote against your proposal are still bound by it.
• Creditors whose lending is unsecured can’t take further action.
• If payments are regular and on time interest is usually kept frozen.
• We will prepare your proposal, including agreeing your personal and household expenditures based on guidelines acceptable to creditors.
• You only have to make a single payment each month.
• The terms of an IVA will usually enable you or your spouse or partner or a relative to make arrangements to buy your share of the net worth of your home or to make extra payments, rather than the home having to be sold. This may be done through a remortgage or a loan. (Net worth means its value after any debts secured on it have been paid.)
• On completion of the IVA, the balance of what you owe your creditors is written off
• You may be able to continue running any business you have.

Cons

• Your IVA will be entered into a public register.
• If there is some equity (value) in your home after taking account of the mortgage(s) on it, you will probably have to pay for your share, usually in the fifth year of your IVA, by remortgaging the property. If you can’t get a remortgage, you may have to continue making monthly or quarterly payments from your income, for up to another year.
• If your circumstances change, and your practitioner can’t get creditors to accept amended terms, the IVA is likely to fail. You will then still owe your creditors the full amount of what you owed them at the start, less whatever has been paid to them under your IVA.
• If your IVA fails, you may be made bankrupt.

For more information regarding IVAs please click here

Our Facebook Page