|
|
 |
 |
IVAs FAQs
Everything you need to know in our IVA FAQ...
What is the definition of an IVA?
An Individual Voluntary Arrangement (IVA) is a legally binding agreement that exists between someone in debt and the people and businesses they owe money to. It sets out the terms of new, reduced debt repayments, such as the monthly amount to be repaid and the length of the arrangement.
As an IVA is a legal contract, governed by the Insolvency Act 1986, it needs to be drawn up and managed by a licensed Insolvency Practitioner, such as the team behind melaniegiles.com.
Why would you need an IVA?
An IVA is often the best option for people struggling to pay large amounts of unsecured debts. To qualify for an IVA, you should generally have debts in excess of £10,000 and be owed to two or more creditors. The IVA makes paying off these debts achievable.
When you instruct us to set-up and manage your IVA, we will negotiate with your creditors and agree on either a monthly payment you can afford, or if you have the funds, a one-off sum.
What are the benefits of an IVA?
Aside from not having to deal with your creditors, other benefits of choosing an IVA include:
• Stopping interest from mounting up further
• Preventing creditors taking legal action
• Avoiding the negative stigma of bankruptcy
• Having an easy to afford monthly payment
• Working towards a set date where you are debt free
How does the IVA process work?
Once you speak to melaniegiles.com, we discuss your situation and the options available to you. An IVA is tailor-made to your situation and we always offer advice that best suits your needs.
One of our licensed Insolvency Practitioners reviews your case and once they agree that an IVA is the best option for you to overcome your debts, then we will start preparing your IVA proposals for your creditors. If we believe that an IVA is not the most suitable course of action, then we will not hesitate to recommend and talk you through your other options.
After your IVA has been presented to your creditors, a meeting is called for them to review it and to make any changes that they see fit. If you agree to these changes, then we re-present this as the new IVA proposal and if more than 75% of your creditors agree to the terms then the IVA is ready to be put in place. Payments will soon begin and you will be on your way to a debt free life.
Why use melaniegiles.com?
As an IVA is legally binding and in place for a number of years, it is essential that it is created and managed by qualified, licensed Insolvency Practitioners, such as the team at melaniegiles.com. We are legally qualified to prepare an IVA on your behalf and are well experienced in helping the UKs individuals overcome debt.
Unfortunately, recognising the desperate situation many people find themselves in, many unscrupulous IVA firms have cropped up in recent years, offering poor advice and expensive debt solutions. We pride ourselves in the quality of our service.
Rather than offering a "one size fits all" service, where you are just a reference number to a call-centre operative, we take the time to understand your situation and get to know you. As a client of melaniegiles.com, you will be given the market leading service that we are well known for and will be treated with the utmost respect and offered the best advice at all times.
We have helped thousands of other people in debt overcome their money problems. Call us now on 02920 277 678 to enquire about an IVA and find out if it’s the perfect solution for you.
Am I eligible for an IVA?
You may qualify for an IVA if you are in employment or have income that leaves you with more than £100 a month, after all reasonable household and general expenditure. You will also need at least two creditors with three lines of credit and debts which amount to over £10,000.
If you do not have an income then you may still qualify for an IVA if you have a lump sum available to make a "one-off" offer of full and final settlement.
How much will my monthly IVA payments be?
The amount will be one that you can afford, and will be less than the current total you are repaying each month, although as the actual amount will depend entirely upon your personal circumstances, it is impossible to tell without knowing your income and expenditure details.
Will I lose my job if I have an IVA?
Only some professions look upon an IVA unfavourably. In general, most businesses are supportive of employees who are making efforts to overcome debts. You may have issues if you work in the legal, financial or security sectors, so check this out before applying for an IVA.
Is there a risk I may lose my car if I have an IVA?
If your car is essential for your work and home life, and is not excessively expensive, it is very unlikely that creditors would expect you to sell your car – after all, a reliable vehicle will be essential for the duration of the IVA to enable you to travel to work in order to pay back your creditors.
If I am successful in applying for an IVA, which debts does it cover?
An IVA will cover all your unsecured debts. Often these include debts on in-store credit cards, personal loans and other credit facilities. Also, regularly included are utility debts and self-employed trading debt such as tax payments and council tax – as well as contingent or uncertain amounts such as potential mortgage or HP shortfalls.
How will an IVA affect my bank account?
This really does depend. If you are currently banking with a bank who you owe money to, you should immediately make arrangements to open an account with a new bank. There are many banks out there who will be more than happy to accept insolvent parties as new customers; your debt advisor will be pleased to advise you as to potential options.
If I have a car on finance, is there any risk the company will re-possess it as a result of an IVA?
Where it is essential, i.e. where you need it to get to and from work, most creditors will allow you to keep your car. When we set up your IVA we can put in place a provision whereby you will continue to pay the finance company their normal monthly instalments. In the vast majority of cases the finance company will choose to continue collecting the monthly payments rather than repossess your car.
With an IVA in place, can creditors charge interest or take legal action?
The second the IVA is accepted by your creditors, they can no longer charge you interest on your outstanding debts and you will not be subject to any form of legal action.
Does my employer need to know about the IVA?
It is not a necessity, no. The Insolvency Practitioners handling the IVA will have no reason to contact your employer unless they are one of your creditors. You should however, check your contract of employment to ensure there are no stipulations which will affect your employment, or obligations to inform your employer of the IVA’s existence.
How does an IVA affect my pension?
This depends heavily on the type of pension provision you currently have in place. In the case of an employee making regular contributions to your employer’s pension scheme, your creditors will allow your regular contributions to the scheme to continue. On the other hand, if your pension is a personal one, creditors may well insist all further contributions are frozen for the duration of the IVA. If at any time you receive a one-off lump sum from your pension while the IVA is in place, this may fall under the bracket of a windfall in the eyes of your creditors, and may need to be handed over. However, the value of your pension is generally exempt from both IVAs and bankruptcies.
How long does it take to put the IVA place?
Although delays can occasionally occur if the information we require is not forwarded to us within a reasonable timeframe, usually your IVA will be returned to you within four to six weeks. After the return of your documents, the creditors’ meeting will usually take place within three weeks. During this time your insolvency practitioner will deal with all creditor enquiries on your behalf, writing to inform them that an IVA proposal is in place.
Will the Individual Voluntary Arrangement be advertised?
An IVA will not be, although it is still common place for a bankruptcy order to be advertised in the local paper. You should be aware that your details will need to be registered on the Insolvency Register - a copy of which is available online. However, this is only generally used by industry professionals and prospective lenders.
Where does the IVA creditor meeting take place?
Normally at a place convenient for the creditors, usually at the Insolvency Practitioner’s own offices; it is however, becoming more and more unusual for any of the creditors to actually attend the meetings. Therefore it is not required that you attend.
What happens if there is an unforeseen change in my financial circumstances?
Throughout the duration of the IVA the insolvency Practitioner will keep regular tabs on the income and expenditure in your account; reviewing the details every 6 to 12 months. The Insolvency Practitioner has the power to reduce your payments by up to 15% should it be deemed necessary for you to be able to keep up with the existing payments. If a higher reduction is needed however, this can only be done by holding another creditors’ meeting.
Is it possible to settle the IVA before the predetermined date?
Provided the money you are going to use to settle the IVA comes from a source excluded from the original IVA, or is a contribution from a third party such as a family member, then this is fine. However, revised proposals will need to be placed in front of creditors at a newly convened creditors’ meeting, but predictably, these have an excellent rate of acceptance.
What happens if there is a dramatic change in my circumstances i.e. if I lose my job?
IVAs presented in line with the IVA Protocol (2010 version) allow for a one-off payment break of up to six months to assist for unforeseen circumstances such as redundancy or illness. In every IVA there is also a provision to call further meetings of creditors should such a circumstance arise. Where somebody has been made redundant or has become seriously ill, we are able to persuade creditors to extend the period of the existing IVA, or, in really exceptional circumstances, consider the IVA complete. Importantly, you must tell us as soon as your circumstances change.
What happens if I get a pay rise?
Once again, it is essential you inform your Insolvency Practitioner straight away as it may give rise to an increase in your monthly payments. Unless the pay rise is substantial this is generally absorbed by increased expenditure.
How does it affect my IVA if I receive a bonus, commission or overtime?
Each month you are allowed to earn up to 10% of your basic salary. Any additional funds must be shared with creditors on a 50/50 basis. If the 10% allowance is exceeded, it is your responsibility to keep your insolvency practitioner informed on a monthly basis, and the additional monies will be checked as part of the annual review process.
What happens to my IVA If I win the lottery or receive an unexpected windfall?
Any windfall must be declared on an annual basis and made available for the benefit of your creditors. This is subject to an upper limit of you paying your debts in full, together with the insolvency practitioner’s fees to date.
So who pays the Insolvency Practitioner’s fees?
The Insolvency Practitioner’s fees are all tied into the agreed monthly contributions you make towards the IVA, or from assets which you liquefy. The first IVA payment should be returned with your signed IVA proposals, however, this payment will be returned to you in the event the proposals are not accepted.
How regularly will I have to pay my creditors?
Payments are usually made on a quarterly basis, and are reported at each anniversary of the IVA as part of the Insolvency Practitioner’s annual report.
Can creditors still contact me once the IVA is complete?
No. Once they have agreed to the settlement terms of the IVA they are le
gally bound not to contact you, and cannot change their minds on the terms of the IVA at a later date.
How will the IVA affect my credit rating?
All the credit agencies will get a monthly update of all
existing IVAs. From the date of the original creditors’ meeting the IVA will remain on your record for 6 years.
Can I propose an IVA having been already made bankrupt?
Yes – as long as from the creditors’ point of view they are receiving m
ore money than they would under bankruptcy proceedings. An IVA is generally a far better proposition than a bankruptcy as the costs associated are generally far higher. If assets or disposable income are freely available then an IVA is generally a far better option.
I still have equity in my property. Is this likely to affect my chances of getting an IVA?
Although there is every chance you are still applicable for an IVA, it is important you fully understand how your home may be affected if you enter into an IVA.
If I were to fail to make my IVA repayments, what would be the repercussions?
Firstly it is important that we understand exactly why you failed to make your repayments? If we can help you with those issues we will. The IVA will fall into default if you miss more than 3 contributions. It may also be possible to vary the terms of the contract allowing for changes in circumstance.
Will I be completely debt free by the end of the IVA term?
You will be completely debt free if you follow all the terms of the IVA and make all of your regular payments to deadline. An IVA cannot include arrears of CSA payments or student loans.
The IVA sounds like a perfect solution. How do I start the ball rolling?
First things first. Contact us here at melaniegiles.com. Whether you give us a call, or fill in an online enquiry form our friendly and expert team will listen to your circumstances and offer advice as to whether an IVA is the right solution for you. We will take you through the whole process step by step ensuring the utmost discretion and confidentiality throughout.
Importantly, here at the IVA service our expert negotiators will deal with your creditors for you, so you don’t have to worry about the pressure some organisations will try to apply. We are the experts in such situations.
Each and every IVA is completely unique to reflect each individual’s personal circumstances. A lot of factors will influence the amount you are required to pay back. Factors such as level of income, living expenses, the status of your employment and the number of creditors and amounts owed. Once calculated, the IVA proposal is drawn up to represent one monthly payment, leaving you with enough money to live on.
What advantages are there of an IVA over other debt solutions?
• Payments are scheduled for a set time period, often 5 years. After which point any outstanding debt is written off
• No legal action can be taken by creditors once the IVA has commenced
• No interest or charges can be added to the debt once the IVA has begun
• Your property is generally protected – subject to the need to explore an equity release during the final year of the IVA.
Still have questions regarding IVAs?
Then call Melanie Giles and she will be happy to assist.
Call Melanie Giles on 02920 277 678 or please fill in an IVA Enquiry Form.
|
|
|
|
