An individual voluntary arrangement (IVA) is a way to contract with debt you’re struggling to repay. It’s a harmony between you and your creditor’s organizations you be in debt to that sets out when and how you’ll repay them. For example, you might assure to give them some of your salaries each month or to pay them a lump sum. In return, creditors may concur to wipe out some of your debt; it means that you won’t need to pay the full amount owed.
Interlocking of IVA
It is probable for a couple to set up two human being voluntary arrangements that are administered as one, once they have been conventional by creditors. This will permit the household to make one affordable repayment to all creditors through the IVAs. Any joint debts will be included within both preparations.
In some cases, it may be that a person wants to offer a one-off payment to their creditors as a full and final resolution. If you have enough savings, are in the process of selling an asset which will release money for your unsecured creditors. You may also have a member or friend who is ready to provide funds; you may be able to enter into what is recognized as a ‘Full and Final IVA.
In this type of IVA, you make one, large reimbursement to write off debts rather than ongoing monthly payments. A bankruptcy practitioner can advise as to whether this solution is suitable for you.
Individual voluntary Arrangement Protocol
- The IVA Protocol is a normal framework for dealing with straightforward consumer IVAs and applies to both IVA providers and creditors.
- By accommodating the content of the protocol, IVA providers and creditors concur to follow the processes and agreed certification that forms part of it.
- IVA providers point to their acceptance of the content of the protocol by drawing up a proposal based on the average documentation, and which states that it follows the protocol.
- Creditors are expected to bear by the terms of the protocol in relation to proposals drawn up on that basis.
- Following this strategy is voluntary, and they were intended to encourage consistent good practice across the industry.
- Most creditors have agreed to abide by the protocol and this has made the process of proposing and administering IVAs much simpler.
- The IVA protocol provides a set of standard terms and circumstances which most straightforward IVAs incorporate
Cost of registering an IVA
The insolvency practitioner will never ask for upfront fees before proposing your IVA to your creditors. They will only charge fees if an IVA is subsequently permitted by your creditors and our fees are only taken from your monthly payments or asset realizations paid into your agreement.
They also offer, as part of your proposal, to start to distribute a percentage of the payments made by you from as early as month 3, which means the balances payable to your creditors are reduced from the outset of your arrangement.