Become an Introducer Today!

Personal debt? Visit our dedicated debt help site >>

IVA FAQS

Q. Can the client protect their house?
A. An IVA prevents creditors from taking action against the client and their property. However, before the end of the IVA it may be necessary for the client to introduce a sum of money into the arrangement in place of a proportion of their share of equity in the property. This is normally done by remortgaging the property. If remortgaging is not possible, the client may be able to extend the arrangement for a further twelve months during which time the client pays additional contributions in place of equity.

Q. How do the IVA fees get paid?
A. As soon as the client decides to proceed with an IVA then their payments to creditors cease and contributions towards the IVA start. These will be set at a figure which the client has agreed they can afford. It takes around 6 - 8 weeks to set up an IVA and the first two contributions will be treated as a deposit towards our Nominees fees. Once the arrangement is approved the client will only pay the monthly contributions agreed by the creditors.

Q. Is the IVA likely to be approved?
A. Yes, we would not recommend an IVA as a solution if we did not believe it had more than a reasonable chance of being approved. It would be unfair to the client and a waste of everybody's time and energy. It is rare for any of the IVA's that we assist with to be rejected as creditors are generally willing to negotiate. However, if the IVA is not approved the client can put forward other solutions to their creditors including debt management and also bankruptcy. We will continue to help the client.

Q. How does this affect the clients' credit rating?
A. An IVA will be shown on credit records for six years which is the same length of time as any other adverse credit is recorded.

Q. Will the client still be able to obtain credit?
A. The IVA proposal normally states that the client can only get credit if the Supervisor allows them to do so. This does not normally apply to individuals in business who can demonstrate that they need credit to be able to continue trading.

Q. Will the client's creditors stop contacting them?
A. Yes, once the IVA is approved all further contact from creditors should cease. It may take a while for creditors to amend their systems but within 1 to 2 months of the IVA starting, all communication from creditors will stop. Creditors are legally bound into the terms of an IVA, consequently preventing them from pursuing clients for the debt.

Q. Can the arrangement be brought to an early conclusion?
A. Yes, we can convene a variation meeting to offer a sum of money in full and final settlement of the clients' obligations under the IVA. Creditors are likely to agree to accept a lump sum to bring the arrangement to an early end if we can show that the client is paying creditors as much as they can afford. The sum of money could be raised by:
1. Remortgaging a property
2. Funds from a friend/relative
3. Cash in policies (Subject to getting you expert investment advice)

Q. Who gets to know about the IVA?
A. Unlike bankruptcy an IVA is not advertised in a newspaper. Clients' employers will not know unless they choose to tell them. The IVA is however, registered and this may be picked up by credit reference agencies who will note the IVA on the client's credit reference file.