- First appearing in the 1986 Insolvency Act, the popularity of the Individual Voluntary Agreement (IVA) has soared in credit crunch Britain. However, due to the different legal systems, they are only available in England, Wales and Northern Ireland.
- IVAs are legally binding and must therefore be drawn up by a licensed insolvency practitioner and presented to creditors on behalf of the individual in debt.
- The result is that your creditors receive somewhere between 10p and 50p out of every pound that you owe. This depends upon the amount that you are able to repay and the value of any assets that you have at your disposal. When an agreement is reached, your creditors cannot add any further interest or charges.
- An IVA rests on a minimum of three quarters of your creditors (in terms of debt value) agreeing to the arrangement as such a high proportion of your debt can be written off. An IVA usually includes any unsecured debt, like outstanding credit card debt and your overdraft.
- An IVA is likely to take any equity in your house into account. In the vast majority of cases, your home will be safe from repossession but you may have to release some of the equity in your property to service the IVA.
- IVA’s are typically suited for those with a minimum of £15,000 of unsecured debt. They are a more attractive proposition than filing for bankruptcy as in the majority of cases, you can keep your home, the details of your IVA are not published and you retain a greater degree of control over your finances. Also, you are afforded greater freedom to conduct your business affairs.
To see if an IVA is the right debt solution to suit your circumstances, take the 15 second debt wizard at Harrington Brooks. You simply have to fill in a few details to see if you can reduce your monthly debt repayment and be debt free within just 60 months with an IVA.