For people with significant debts (usually £15,000 or higher), an IVA (Individual Voluntary Arrangement) can be a very useful way out of debt that avoids some of the downsides of bankruptcy.
An IVA is a legally-binding agreement between you and your creditors. It involves making regularly monthly payments, based on how much you can afford, usually for a period of five years. Once the five years have passed, your remaining debt will be considered settled.
As with any debt solution, it’s important that you are sure you will be able to keep up with payments before you enter an IVA. But nobody can be 100% certain of what will happen in the future – and if you find yourself in a situation where you can no longer keep up with your IVA terms, it’s essential that you act fast.
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Your privacy is important to us. All correspondence is held in the strictest of confidence and we will only request information required to find your best debt solution.Your debt adviser is not just responsible for arranging your IVA. They will support you throughout the course of your IVA looking out for the best interests of both you and your creditors, and acting as a point of contact between the two.
If your situation does change significantly and you are unable to keep up with your IVA payments, your debt adviser may be able to organise an IVA variation. This is a change in your terms to accommodate for your change in circumstances.
For example, if you have taken a salary cut that reduces your disposable income by 20%, your debt adviser may be able to negotiate a 20% reduction in your IVA payments.
However, arranging your new terms will be much the same as arranging the original terms of your IVA: your debt adviser will work with you to create a new IVA proposal, which will be sent to your creditors. Creditors accounting for at least 75% of your debts must approve the new IVA proposal for the new terms to go ahead.
If your IVA variation is not approved, you have a choice. You can either:
Tags: iva, individual voluntary arrangement, alternative to bankruptcy
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