{"id":10915,"date":"2011-02-03T12:05:07","date_gmt":"2011-02-03T12:05:07","guid":{"rendered":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/?p=10915"},"modified":"2020-10-20T10:14:07","modified_gmt":"2020-10-20T09:14:07","slug":"settle-debts-in-an-iva","status":"publish","type":"post","link":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/settle-debts-in-an-iva\/","title":{"rendered":"Settle debts in an IVA"},"content":{"rendered":"\n

An essential precondition to be eligible to enter an Individual Voluntary Arrangement (IVA) is that you must first be insolvent. While there are alternative solutions for the insolvent debtor such as bankruptcy, this review will just consider the pros and cons of the IVA solution if you are unfortunate enough to find yourself in this predicament.<\/p>\n\n\n\n\n\n\n\n

An IVA will provide relief from your debts while enabling you to repay as much as possible to your creditors. You avoid the stigma of bankruptcy with its associated disabilities, restrictions and obligations, while enabling you to keep better control over your assets by for example being able to retain your home and your car. While in an IVA you will be able to retain your employment and if you are self-employed you can remain in business for the full term of your IVA leading to higher returns for your creditors.<\/p>\n\n\n\n

Your IVA will be binding on all your creditors, including dissenting \ncreditors, provided that it is accepted by 75% of the creditors who \nopted to vote at the formal meeting of creditors. Voting rights are \ndetermined by the amount of debt you have with each creditor. One way to\n look at it is that each pound of debt is equal to one vote. You will \nachieve a higher level of realizations in an IVA than you would achieve \nin bankruptcy, leading to higher returns for your creditors. You will \nalso incur lower costs in an IVA than you would incur in bankruptcy, \nagain leading to higher returns for your creditors.<\/p>\n\n\n\n

\"Reading<\/figure>\n\n\n\n

You will be subject to less publicity through all stages of an IVA \nthan you would encounter in bankruptcy. For example, in an IVA there is \nno mandatory publication of your name in newspapers or other \nperiodicals. Should your circumstances change significantly over the \nduration of your IVA, you can, with the agreement of your creditors, \nvary the terms of your IVA. There is also a trend towards minimal (and \nreducing) court involvement in IVAs. This benefits you and your \ncreditors. The IVA process is well regulated so you will have a high \nlevel of protection from unscrupulous practices. On approval of your \nIVA, all creditors must stop contacting you, interest on your debts is \nfrozen and all penalties and charges are stopped. All your debts are \ndealt with and written off in a known and finite time period \u2013 usually \nfive years \u2013 but it can be shorter.<\/p>\n\n\n\n

Your monthly payments in an IVA will be affordable. As an alternative\n to monthly payments you can enter a one-off IVA by making a single lump\n sum payment with a considerably shorter duration of perhaps less than \none year. You do have to pay the set-up, supervision and disbursement \ncosts of the IVA. However, these costs are taken from your monthly \ncontributions to your IVA.<\/p>\n\n\n\n

If creditors do not accept your IVA at the formal meeting of \ncreditors, they are free to pursue other legal actions against you such \nas petitioning for your bankruptcy, obtaining court judgments against \nyou or registering charges on your assets. Rather than accepting or \nrejecting your IVA proposal as it stands, creditors also have the option\n of modifying its terms at the outset. Such modifications often seek to \nincrease your monthly contributions to your IVA and your IVA may fail \nduring its term of supervision if you are unable to sustain such \nenhanced payments. Creditors may seek to limit the level of living \nexpenses which you may claim in your IVA making it less generous than \nwhat is allowed in bankruptcy. This increases the possibility that your \nIVA may fail in supervision if you cannot reasonably live within the \nlimits imposed. If you do not agree to the modifications proposed, then \nyour proposal is deemed to be rejected.<\/p>\n\n\n\n

The term of your IVA during which you must make payments is usually \nfive years versus a maximum of three years in bankruptcy. You will not \nbe allowed to borrow for the duration of your IVA, except with the \nexpress permission of your supervisor and\/or your creditors. You credit \nrating remains poor even after completion of the term of your IVA. Your \nname will continue to appear on your files \u2013 as maintained by the credit\n reference agencies- for six years from the commencement of your IVA or \nfrom when your default was first registered.<\/p>\n\n\n\n

When you have considered the pros and cons of an IVA for you, you \nshould consider seeking professional advice from one (or more) of the \nmany firms offering insolvency services. They use the services of \nspecialists called Insolvency Practitioners who will provide you with \nfree advice outlining all your options. You should also consider \ncontacting CAB or the CCCS and you may even have to take independent \nlegal advice, particularly when you own or partially own property such \nas a family home, so that the rights of other parties are protected. \nSuch third parties include your partner or spouse (whether you are \nco-habiting or estranged) any co-owners of property and any dependents \nyou may have.<\/p>\n","protected":false},"excerpt":{"rendered":"

An IVA will provide relief from your debts while enabling you to repay as much as possible to your creditors. <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-10915","post","type-post","status-publish","format-standard","hentry","category-iva-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/10915","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=10915"}],"version-history":[{"count":2,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/10915\/revisions"}],"predecessor-version":[{"id":13535,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/10915\/revisions\/13535"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=10915"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=10915"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=10915"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}