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Below are some of the most frequent IVA questions and answer that we are regularly asked. If you have any other IVA questions, get in touch and we will be happy to answer them for you.

Q. What is an IVA?

An IVA is an Individual Voluntary Arrangement. It is a legally binding contract between you and the people that you owe money to, your creditors. It is governed by the Insolvency Act 1986 and this normally lasts for 60 months. During this time you pay a fixed amount per month that is then divided up evenly and paid to your creditors. The amount that you pay is based on what you can realistically afford.

Q. What are the living costs in an IVA?

In an IVA you will have an agreed budget for your all your living costs. There are allowances made for this in the agreement. These expenses will be mostly based on what you currently have to pay out each month. You should declare all normal monthly expenses to your creditors so they understand your situation more clearly. There may be some restriction on some expenditure items, such as mobile phone for example.

Your IVA payment is what is left after all your living costs have been taken into consideration.

Anything you need to pay on a daily or momthly basis is classed as a living cost. This includes Mortgage/Rent, Food/Groceries, Clothes, Travel/Transport, Car HP, Fuel, Parking costs, Council Tax, Electricity, Gas, Heat and Light, Phone, Mobile, Internet, even Sky TV if you have it.
Most of the allowable expenses are included in the IVA payment calculator.

Q. How is my IVA payment calculated?

Your IVA payment is very easy to calculate. All you need to do is take your living costs from your income.

ExampleIncome = £1000Expenses = £800

IVA Payment - £1000 - £800 = £200

Q. How long does an IVA last?

Typically an IVA can last for about five years, but in some cases this can be extended.
It is also possible to do an IVA in a shorter period of time, if you can produce a partial or full lump sum of money.

Q. How much does it cost to get an IVA?

This will depend upon your income, expenditure, and personal circumstances. We treat every case individually. However, you will only pay what you realistically can afford and not what the creditors are asking for. This fixed amount is then paid each month by standing order.

Q. Who can do an IVA?

An IVA can be used by nearly all UK residents.

  • Single people
  • Married people
  • Business Owners
  • Homeowners
  • Tenants

Q. Will my credit rating be affected in an IVA?

Whilst you are in an IVA, you will understandably not be able to obtain credit of any sort and you will have to give up any existing credit that you have. This continues until your IVA is complete. So, your credit rating is not affected forever. When it is finished your credit rating should begin to repair itself.

Q. What about fees?

The fees for an IVA are all set by the creditors (no matter which provider you use), so if your IVA application is successful, the only thing to worry about is whether you have chosen the right Insolvency Practitioner or not.

All fees are taken out of your affordable monthly payment so you will never be asked for additional fees or receive a bill from us.

Q. What about no-win no-fees?

We work very hard at making your IVA proposal successful, but if for any reason your IVA does not go through, we charge nothing whatsoever.

Q. Will my creditors agree to an IVA?

Most creditors are fully aware of an IVA, as it's been in existence for over twenty years. If 75% of your creditors by value vote in favour of your IVA, then all creditors are bound by its terms. Creditors can suggest alterations to your proposal and you can choose whether to accept them or not. If your creditors vote against your proposal you still have the option of an informal arrangement.

Q. When my IVA is finished, what happens then?

As long as the terms of the proposal have been fully carried out, your creditors will have no further claim against you and the balance of any unpaid debts are written off.

Q. What are the advantages of an IVA?

  • You only have to make one monthly payment or in some cases a one-off payment
  • The stigma of bankruptcy is avoided
  • Unlike bankruptcy, an IVA is not reported in local newspapers
  • An IVA is just between you and your creditors, so it's confidential
  • Protection from creditors, once the IVA is agreed your creditors cannot bring any action against you as long as you comply with the IVA.
  • Unsecured debts cleared usually in 60 months
  • An IVA could safeguard your property

Q. What are the disadvantages of an IVA?

  • If you are a homeowner with equity in your property you may be required to introduce part of your share of this equity in the final year of the arrangement. A remortgage may be restricted and on less favourable terms. If you can’t get a remortgage your arrangement can be extended for up to another year.
  • If your circumstances change, and your insolvency practitioner can’t get creditors to accept amended terms, the IVA is likely to fail. You will still owe your creditors the full amount of what you owed them at the start, less whatever has been paid to them under your IVA.
  • If your IVA fails, your creditors may request that you be made bankrupt. This will always be discussed before your arrangement commences
  • Your credit rating may be impacted for up to six years from the commencement of your IVA.

NOTE: In an IVA you will have an agreed budget for your living costs. There are allowances for this in the agreement. These expenses will be mostly based in what you currently have to pay out each month. You should declare all normal monthly expenses to your creditors so they understand your situation more clearly. There may be some restriction on some expenditure items, such as mobile phone for example.

Q. Can I enter into an IVA if I have a Bankruptcy order against me?

If the bankruptcy hearing has not taken place then our Insolvency Practitioner would issue an Interim Order to halt proceedings while an IVA proposal is put together. If the bankruptcy order has already been issued it is still possible to propose an IVA but it is more difficult.
Remember any court fees will be added to your debts.

Q. How do I go about setting up my IVA?

Initially all you need to do is simply complete the IVA online application form. By doing so you are asking us to review your current circumstances and advise whether an IVA is indeed the most appropriate solution to your problems. Once we receive your statement we will either confirm an IVA as appropriate or offer alternative solutions.

If an IVA is deemed appropriate, and you still wish to pursue this option, we provide you with an opportunity to ask one of our specialists any further questions you may have. We will then produce your "Proposal to Creditors" which explains in detail the circumstances of your current problems and your proposals to repay what you can reasonably afford.

The proposal is sent to you for review. If you're happy with everything you sign the proposal and we commence formal negotiations with all your creditors to put the IVA in place. At no time throughout this whole process (usually 6-8 weeks) do you pay any monies over to us.


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Fees and key info

We are happy to provide you with debt advice only. We only charge a fee if you opt for one of our debt solutions. Fees will depend on which debt solution we provide and what your personal circumstances are. All fees will be discussed prior to commencement of any service or debt repayment plan.

Click here to read our fees and key info

Please note: From time to time we may refer you to other services providers or charities such as the CAB.

Money Advice Service

You can get free debt advice from the Money Advice Service – an organisation set up by the Government to offer free and impartial advice to those in debt. Click here for more information.

Client Review

Pressure release realised - at last!

Star rating : 5/5

I had a pleasant reception, a simple concern and evaluation of my situation, an explanation of what could be done, when and how best a plan could be implemented that I could afford. THE RELIEF WAS AMAZING, back to some kind of normality.

I have been under the wing of National Debt Relief for almost 2 years and the attention and assistance provided has been just perfect. We are now looking at a mutually acceptable resolution to my financial situation in the near future. In brief, I would totally recommend the services of National Debt Relief. You will not be disappointed, to quote an old saying "I wish I had done it sooner--much sooner".

Written on 18/09/2013,
Review Centre

Client Testimonial

Absolutely Fantastic

Absolutely fantastic from start to finish! Very efficient and had my iva completed within 4 weeks from initial phone call!

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