IVA Help and IVA Advice

IVA – What is IVA?

IVA is a valuable alternative to bankruptcy, allowing you to make a proposal to the people you owe money to (your creditors) and to reach a final, legally binding settlement.

How an IVA can help you?

An IVA settlement gives you affordable monthly payments over a period of five years. The interest on your loan will  freeze by law and no creditors will be able to contact you directly as ClearStart takes all the hassle for you.

IVA

Because payments are based on what you are realistically able to afford, exact amounts vary. But the monthly amount can start from as low as £150. That is usually significantly less than existing minimum payments on credit cards and loans.

Call us on 0800 988 9345 for more details about IVA 

IVA is often suitable when:

• your unsecured debts are at least £12,000 -£20,000.
• your monthly payments are at least £150.
• you have a stable monthly income.

IVA – Advantages

• Affordable monthly payment.
• You won’t have to go bankrupt.
• You keep your house and car.
• Interest payments are frozen by law.
• Your overall debt is substantially reduced.
• Your friends and family don’t have to know.
• Your debts are cleared in five years.
• Payments are calculated to be affordable; whilst in an IVA your home is protected from legal action and unsecured creditors cannot force you to sell it.

IVA – Disadvantages

• No more borrowing during the IVA period.
• Credit rating is poor for a further year after the IVA.
• Requires 75% of the value of creditors to agree.
• Five year period for IVA.
• If you have equity in your home you may be required to release it to your creditors. This is usually achieved by increasing the level of your mortgage towards the end of your IVA. If this is not possible you are likely to be required to extend your payments by up to an extra 12 months.

How to apply successfully for an IVA?

ClearStart is able to help you make the decision as to whether or not an Individual Voluntary Arrangement would be the best choice. A dedicated department processes hundreds of IVA applications for individuals every month. ClearStart is a member of DEMSA whose code of conduct is approved by the Office of Fair Trading

Call us on 0800 988 9345 for immediate help

(Calls from mobiles and other networks to 0800 numbers may incur a charge. When you speak to us, ask us to call you back so that you do not have to pay for the call).

IVA – Frequently Asked Questions

Q: Who can apply for an IVA?

Answer: To qualify for an IVA, you must owe £12,000 or more of debt, be a resident of England, Wales or Northern Island, and have a minimum disposable income to pay off your monthly installments.

Q: What if the creditors don’t agree?

Answer: For an IVA to come into effect, creditors representing 75 percent of the total value of the debt have to vote in its favour. If the creditors don’t agree, the Insolvency Practitioner can rework the terms of the proposal and once again negotiate with them. If they agree, the IVA will become applicable. Otherwise, you can consider other debt solutions such as a debt management plan.

Q: Will my credit ratings be affected? 

Answer: If you are in debt, it’s likely you may have an adverse rating. During the IVA, you will not be allowed any further unsecured borrowing until it is successfully completed. However, gradually the situation will ease and your credit rating will begin to improve.

Q: What’s the minimum payment  I have to make?Answer: The minimum monthly payment to be paid into your IVA varies from case to case. To know more about an IVA and the minimum payment that you would be required to make, you can talk in confidence to our debt advisors.

Q: Will I lose my home? 

Answer: Unlike bankruptcy, you don’t stand to lose your home with an IVA. However, you may be required to release your equity by taking out a remortgage in the last year of the IVA.

Q: Can I apply for an IVA if I am self-employed?

Answer: You can apply for an IVA if you are self-employed provided you are able to maintain your monthly minimum repayments.

Q: Which one is better – an IVA or bankruptcy?

Answer: An IVA is definitely a better alternative to bankruptcy. However, to be accepted for an IVA, you need to meet the qualifying criteria. Also, the decision will be based on personal circumstances, depending on what assets you have and whether you have a career that you wish to protect.