Most IVAs are made up of debts owed to credit card companies, store cards and personal loans which the debtor is unable to repay. The idea of an IVAs is not to avoid having to repay outstanding debts which have accumulated, but rather consolidate them and have their repayment managed for you by a reputable company who specialise in debt management and IVAs.



IVAs are for those who have debts which are a minimum of £15,000, there is no maximum limit, and offer for some people a much preferable solution to bankruptcy. Creditors generally expect to have at least thirty percent of what is owed returned to them through an IVA, in exceptional circumstances they may be willing to accept twenty five percent.

The IVA repayments will be set at a level which enables the debtor to be able to meet the repayments while still having sufficient money to live a reasonable lifestyle, it is therefore part of the criteria when applying for an IVA to have a stable monthly income to be able to keep up the repayments and honour the IVA agreement. If someone defaults on their payments the company who is managing the IVA may well file for bankruptcy of the debtor. Debtors should be fully aware of the terms and commitment required prior to signing any IVAs.

Setting up an IVA usually takes between four and six weeks depending on how quickly the debtor can provide information and evidence for the Insolvency Practitioner on which to build the case. Initially the debtor will have either a face to face or telephone consultation with the Practitioner to discuss the situation and confirm that an IVA is the best approach and way to deal with their particular debt situation.

Once an IVA has been decided to be applied for the Insolvency practitioner will require all information relating to household income and expenditure, including all debts and the names of all of the creditors. IVA can be made for an individual or joint (couple) living within the same household, marriage it is not a requirement for a joint IVA. The Insolvency practitioner will then spend time verifying that all of the information is valid and that they have been told the whole truth. This is to show the creditors that the amount to be repaid each month is the full amount that the individual or couple can truly afford. The Practitioner equally makes certain that the debtors can realistically afford the repayments and that they have the means to keep repaying for the full five years while maintaining a reasonable lifestyle.

There are several different types of IVA, although they are all very similar there are options which may be more suitable, for example there is an IVA which has only monthly payments over sixty months, a lump sum only IVA which is normally from re-mortgage of property or monthly payments with a lump sum. The Insolvency Practitioner will advise as to which one is most appropriate and suitable.