How much will I end up repaying?
Once you are referred to an Insolvency Practitioner they establish how much you can realistically pay your creditors each month.
Providing 75% (by debt value) of creditors agree to the proposed amount, it will become legally binding on all of them, so you can then multiply this amount by 60 months and this would then give you an indication as to the total amount you will repay. Please note however, that should your circumstances improve then the agreed monthly repayment may be increased.
In turn this will also indicate the saving or discount such IVA’s offer on the total amount of debt you need to repay.
E.G: If the agreed monthly amount is £250 and the duration of your IVA lasts 60 months, you will only ever pay £15,000 (250 x 60).
Providing you successfully complete the Individual Voluntary Arrangement, even though you have only repaid a percentage of your total debts, all of outstanding debts will be deemed to have been paid off. So if you originally owed £25,000 the remaining £10,000 would be written off and you will once again be free of debt. This £10,000 written off is the discount often referred to by IVA companies.
Is an IVA legally binding?
Yes – Providing at least 75% of creditors agree to it an IVA is legally binding on all creditors.
Clearly an Individual Voluntary Arrangement (IVA) can be a very powerful way to wipe your slate clean and start again. However it shouldn’t be considered as an easy option – failure to stick to it will still allow your creditors to petition to make you bankrupt, you will also probably loose all of the spare equity you may have built up in your home. To consider all of the advantages and disadvantages of an IVA please click here advantages and disadvantages of IVA’s.
How do I set one up?
An IVA is not a suitable option for everybody and may not be the best option for you. It will need to be set up by a firm of Insolvency Practitioners
If after completing an initial review of your circumstances we feel it may be right for you, with your permission, we will forward your details on to our appointed debt management and IVA firm for them to discuss it together with any other debt solutions with you after closely considering your circumstances.
