All about IVAs
Common IVA questions
If you're thinking about entering an IVA, you'll have some questions you'll want answers to. You can call one of our IVA specialists on 0161 672 8990 - or you might find what you're looking for in our Common IVA questions.
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What happens if I can't make my IVA payments?
It doesn't mean your IVA immediately fails. It does mean there's a risk that'll happen, so it's vital you get in touch with us, so we can figure out what needs to be done. If your IVA does fail, there's a risk that you could be made bankrupt, so it's important that you don't just ignore the problem.
If you've run into long-term problems (because your income has dropped, for example, or your monthly expenditure has risen), we might need to draw up an IVA Variation (basically a chance to redefine the terms of your Individual Voluntary Arrangement, so it's still the best way for you to tackle your debts).
If you're worried about making the next payment or two, you might be able to miss them - and make those payments at the end of your IVA.
If there's simply no way you can bring your IVA to a successful conclusion, you might need to look at your options: like entering bankruptcy.
Will I be able to apply for credit after my IVA finishes?
You will. At first, however, you might find it hard to be accepted - and you might find you're offered credit with less favourable terms, such as higher interest rates - because your IVA will stay on your credit record for six years from the day it starts. So if you've just finished a five-year IVA, it'll be a year or more before it disappears from your credit record.
Will my car be at risk if I enter an IVA?
Lenders understand that cars are a necessity, since people need them for work, for their children, and for all kinds of other things. For many of us, public transport (or a bike) just isn't a practical alternative.
So you'll be able to keep your car, unless it's a particularly expensive one - in which case you may be required to sell it and buy a cheaper one, so you can put some extra money into your IVA.
On the other hand, you may have to remortgage to release some of the equity in your home if you're a homeowner. If you can't do this, your IVA may be extended by a further 12 months.
Can I set up an IVA on my own?
No. As a legally binding insolvency solution, an IVA cannot be set up without an Insolvency Practitioner. Known as 'IPs', they're professionals with the experience and qualifications to oversee insolvency cases.
An IVA shouldn't be confused with a debt management plan, which a borrower could arrange on their own or ask a professional debt solutions company to arrange.
All IVAs require an IP - and all IPs will charge for the work they put into this.
What does an Insolvency Practitioner (IP) do?
An IP is responsible for putting together the IVA Proposal - the document that tells your lenders your 'side of the story' and lays down how you and your IP think your IVA should work out.
For your IVA to be approved, this proposal must be agreed by lenders owed at least 75% of your total unsecured debt.
Assuming your IVA is approved, your IP will be there for you all the way through. They'll review your IVA regularly to make sure the terms are still realistic. They'll also answer any questions you have and deal with any issues that may arise (if you run into financial difficulties, for example, they'll try to find a way to help you bring it to a successful conclusion).
What is the IVA Register?
The proper name is the Individual Insolvency Register. It's an online register with details of people who enter an Individual Voluntary Arrangement, bankruptcy or a DRO (Debt Relief Order).
If you enter an IVA, the Register will show:
- The date your IVA was approved
- Your name
- Your address
- Your date of birth
- Your gender
- The name and address of the supervisor in your IVA
Will my employer know about my IVA?
You don't have to tell your employer about your IVA unless there's something in your contract that says you have to. And your IP wouldn't contact your employer unless they were one of your creditors.
In theory, your employer could find you if they searched the Individual Insolvency Register, but this isn't the kind of thing that most people would think of doing unless they had a good reason.
It might depend on your job, though. If you work in certain areas, like financial services, your employer might have a policy of carrying out credit checks on their employees every couple of years.
To find other sources of free advice visit Money Helper. It's here to listen and give free, impartial, trusted guidance. Based around you and backed by government.
Is an IVA right for me?
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To find other sources of free advice visit Money Helper. It's here to listen and give free, impartial, trusted guidance. Based around you and backed by government.
Subject to eligibility and acceptance. Fees Payable. Debt write off applies to unsecured debts only and on completion of an IVA, alternative solutions may be offered. If your IVA fails, it could lead to Bankruptcy. Your ability to obtain credit will be affected for at least 6 years. Homeowners may be required to release the equity in their property.