What are the effects of an IVA?
As long as you continue to pay the agreed amount each month you’ll be protected from any further action being taken against you by your creditors. Interest and charges will normally be frozen. Your credit rating will not be as seriously affected as it would in bankruptcy.
Do all my creditors have to agree to an IVA?
To approve your IVA, at least 75 per cent (by debt value) of the creditors who vote at a meeting, must accept your proposals. Even if they don’t vote, or they vote against your proposals, each of your creditors will be bound by the agreement as long as it has been accepted by this majority.
How much do I have to pay?
We will advise you fully about the amount that you should propose to pay into your IVA. In principle, however, the payment will be based on the amount you have left over after we’ve made an allowance for all the day to day living expenses of you and your family. Your creditors will usually require that these payments are maintained for five years.
What happens at the end of the agreement?
As long as the terms of the proposals have been fully performed, the creditors who were included in the agreement will have no further claim against you and the balance of any unpaid debts is written off.
How much does an IVA cost?
All the costs associated with your IVA are included in the payments you make in to it. You don’t pay anything extra.
If I set up an IVA will anyone interfere with the running of my business?
As long as you stick to the terms of your IVA, you can carry on running your business under your sole control and without any outside interference.
Does an IVA affect my credit rating?
Whilst the IVA is in place you are not allowed to take out any further unsecured credit such as credit cards, store cards, personal loans, etc. This is a standard stipulation of an IVA and a note will be put on your credit file alerting potential lenders to the fact that you have entered the agreement. This note will remain on your credit file for a total period of six years (i.e. normally one year longer than the duration of the IVA). While this record is on the credit file many lenders will choose either to lend at a high interest rate or not at all. There are some lenders who specialise in mortgages or secured loans for people with previous credit problems, contact us if you require any help regarding this.
Who will know that I am on an IVA?
Unlike bankruptcy, an IVA is not reported in local legal notices although this information forms part of your credit file.
If you have any further questions, please contact us.