IVAs


IVAs – Your Questions Answered


Individual Voluntary Arrangements or IVAs were introduced by the government as a new debt management solution in the late 1980s. Although many people know about IVAs, there’s still some confusion around how they work. Here, Darren Varden, Managing Director of Bury-based IVA specialists Varden Nuttall Ltd, answers some of the questions he’s most often asked about IVAs.

What is an IVA?

It’s a legally-binding agreement between you and your creditors. An IVA must be drawn up by a licensed Insolvency Practitioner (IP) like Varden Nuttall, who’ll supervise the IVA for its duration. You’ll make affordable monthly payments to your creditors for a set time period, usually five years, after which any remaining debts within the IVA are written off. You’ll be legally protected from your creditors and your IP will liaise with them on your behalf.

How much of my debts will I end up paying off?

That depends on how much you can afford to pay each month. With a Varden Nuttall IVA, you could write off up to 80% of your unsecured debts when the IVA ends, sometimes even more.

What happens if my circumstances change during the IVA?

If your income and outgoings go up or down during the IVA, your monthly payments may also change. You’ll need to speak to your IVA supervisor as soon as you find out about any changes. As you’d expect, increasing your payments is unlikely to be a problem. But if you want to pay less, your creditors may ask to extend the IVA term.

What happens if I miss a payment?

An IVA is a legal agreement and you’re obliged to make set payments each month. Missing just one payment might be OK in exceptional circumstances, but missing two or more might cause your IVA to fail. Speak to your supervisor at once if you can’t make an IVA payment.

Can I pay my IVA off early?

If you receive an unexpected lump sum, such as a windfall or inheritance, you must pay this money into the IVA on top of your monthly payments. If there’s enough money to meet your debts and IVA fees in full, plus any statutory interest, then your IVA will finish early. Alternatively, you could make an offer to your creditors through your supervisor for a lesser amount.

Why is an IVA better than bankruptcy?

If you qualify for an IVA, there are several advantages over bankruptcy. For example, you’ll be able to keep your home and any other necessary assets. Your employment isn’t usually affected and you’ll avoid the stigma attached to being a bankrupt. And whilst your name will be entered on the Insolvency Register, your IVA won’t be published in the newspapers.

Where can I find out more about IVAs?

Visit the Varden Nuttall website at www.vardennuttall.co.uk for more information about IVAs and to find out if you could qualify.



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