Published in Debt Solutions Guide, IVA Focus Features on Friday, November 19 2004

An Individual Voluntary Arrangement (or IVA) is an official debt repayment plan that in most cases includes the freezing of interest, reduction in the total amount of debt owing, and legal protection from lenders as long as the terms of the IVA are adhered to.

The key benefits of an IVA are:

• Affordable monthly payments. Your monthly income and outgoings will be carefully assessed to calculate a monthly repayment that is affordable to you.
• No additional fees to pay. The fees for the setting up and supervising of the IVA will be taken from the monthly amounts paid into the arrangement, no fees will need to be paid directly.
• Debt free in 60 months. The IVA will normally last for 60 months, after which time any remaining debt (up to 75%) will be ‘written off’.
• Interest, charges and lender contact stopped. Your lenders will stop contacting you directly, and no more interest or charges will be added to your debts.
• Legally binding.

The IVA must be legally approved and supervised by a licensed Insolvency Practitioner.  The IVA binds both yourself and your lenders to adhere to it.

You will need to carefully consider the following before entering into an IVA:

• If you fail to keep to the agreed terms of the IVA you may be forced into Bankruptcy.
• If you have equity in your home you will need to offer to try to remortgage to release some or all of the equity towards the end of your IVA.
• Your credit rating will be damaged for 6 years.

We will advise further on the implications of entering into an IVA if this is an option for you.

The IVA process

We can initially assess whether an IVA is the right option for you. We are a ‘best advice’ organisation, which means that we will provide a no-cost, unbiased assessment to determine the best solution to your debt problem.

If it is determined that the IVA route is the most appropriate, then we will initiate the IVA process on your behalf. Although an IVA is a legal process, and as such involves considerable preparation work, our aim is to keep any involvement by you to an absolute minimum. 

That means minimum paperwork, no forms and no need to deal with your lenders yourself.

The IVA involves these key steps:

• Your Financial Profile can be completed online or by phone and involves collecting all the information required to propose the IVA.
• A licensed Insolvency Practitioner will be appointed to act as your IVA ‘nominee’ and ‘supervisor’, and will prepare your proposal with your guidance.
• The proposed IVA is presented to your lenders for consideration (at a Meeting of Creditors). Once approved, the IVA will begin and both you and your lenders must comply with the terms of the IVA.
• From here forward as long as you comply with the agreed IVA you will only need to make a single, affordable payment each month, which will be divided amongst your lenders. No further interest will be incurred and at the end of the IVA (normally 5 years) any remaining debt will be written off and you will be debt free.

Read R3’s publication ‘Is a Voluntary Arrangement right for me?’
Read our IVA Questions & Answers