IVA FAQ
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- What is an IVA?
- An Individual Voluntary Agreement or IVA is an agreement made between an individual and his creditors that will allow that individual
to pay off a certain amount of his debt over a specified period of time, after which all outstanding balances are considered written off
legally. IVA in Detail.
- How long does it take for an IVA to be approved?
- It generally takes up to two months for an IVA to be processed and approved. See IVA Process for a more detailed explanation.
- What creditors are covered by an IVA?
- The following creditors can be included in an IVA: unsecured bank loans, Inland Revenue, VAT, credit cards, finance companies,
store cards, and charge cards. Loans from friends and family may also be included. Secured loans, mortgages, child support,
rental property, and leases are not included in an IVA.
- Will an IVA be approved even if not all creditors agree?
- Yes. Only 75% of all creditors are required to be in favor of the IVA proposal for it to be approved. Once it has been approved, the
other 25% of your creditors will be bound to the agreement by law as well.
- Can changes be made to the proposed IVA?
- Creditors can suggest or request for modifications on the proposed IVA during the negotiation phase. You, as the IVA proponent, can
decide whether to accept their suggested modifications or not.
- How often will I need to pay?
- Generally, IVA payments are done on a monthly basis. You may, however, be required to make a lump sum payment based on the agreement
you have made with your creditors. See IVA Monthly repayments.
- How much will I need to pay?
- Typically, a minimum of £200 per month is required as payment; however, this figure may vary depending on your financial capacity to
make monthly payments. The amount may be altered even when the IVA is already put into action through a request made by the Insolvency
Practitioner handling your IVA. These requests for payment change are usually based on your present financial condition as well.
- How are payments made?
- A separate bank account is usually set up to facilitate the monthly payments for your IVA. The IP working on your IVA usually has control of this bank account.
- Will my credit rating be affected? How?
- Once you decide to undertake an IVA, you will be required to give up your current credit; you will also be prohibited from making any
additions to your unsecured borrowings until the IVA has been successfully completed. Once the IVA has been completed, your credit rating
will be repaired.
- Will the IVA affect my home ownership?
- You will not have to sell your property when an IVA is active. If you own your own home, it is recommended to take steps to re-mortgage
your home once the IVA is completed.
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