This means that your creditors accept a reduced offer of repayment to settle their debt. By entering into an IVA, your total debt repayments – including costs – can be reduced by up to 40-60%!
Payments are usually made over five years, after which the remainder of your debt is written off. During the repayment period, all interest and charges are frozen and you will receive no more correspondence from your creditors.
- All interest and charges on your account are frozen. - Your account is administered by a fully qualified, licensed insolvency practitioner, who takes responsibility for liaising with your creditors and distributing funds on your behalf. - We can perform a confidential review of your circumstances to see whether you are eligible. - A legal process for UK residents (excluding Scotland) with a significant debt problem. - On agreement your creditors accept a reduced offer of repayment in full and final settlement of the debt. - Payments are normally made over a 5 year period, following which the remainder of your debt is written off. - Debt write off applies only where an Individual Voluntary Arrangement is suitable, adhered to and at the end of 60 months. This relates to unsecured debts that were included with an IVA and does not include any secured debts, mortgages, HP or utility bills. Failure to adhere to an IVA can result in bankruptcy. An IVA will affect your credit rating for up to 72 months after the completion of your IVA. - A Fee payable – this is paid out of your month contributions to your IVA and will be notified to you in advance - Homeowners may be required to re-mortgage after 3 years. - Alternative solutions such as debt management may be offered.
The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.
The Insolvency Act 1986 essentially governs issues relating to personal bankruptcy and Individual Voluntary Arrangements and all administrative orders relating to company insolvency.
The Insolvency Act 1986 is an important piece of legislation that cover the IVA procedure. An individual voluntary arrangement (IVA) is a legally-binding agreement that allows you to repay your creditors by making a reduced monthly payment at an amount you can afford. This usually lasts five or six years, and at the end of this time your remaining debt is written off. You make one affordable payment to us each month and we distribute it fairly amongst your creditors. During your IVA creditors are not allowed to contact you or increase your debt in any way.
The Contents of the Insolvency Act 1986 - Part I - Company Individual Voluntary Arrangements -Part II - Administration Orders - Part III - Receivership (ss 22-72H) - Chapter I - Receivers and Managers (England and Wales) - Chapter II - Receivers (Scotland) - Chapter III - Receivers Powers in Great Britain as a whole - Part IV - Winding Up of Companies Registered Under the Companies Acts (ss 73-219) - Chapter I - Preliminary - Chapter II - Voluntary Winding Up (Introductory and General) - Chapter III - Members Voluntary Winding Up (ss 91-96) - Chapter IV - Creditor' Voluntary Winding Up (ss 97-106) - Chapter V - Provisions Applying to both kinds of Winding up - Chapter VI - Winding Up by the Court (ss 117-162) - Chapter VII - Liquidators - Chapter VIII - Provisions of general application in winding up - Chapter IX - Dissolution of companies after winding up - Chapter X - Malpractice before and during Liquidation; Penalisation of companies and company officers; Investigations and prosecutions (ss 206-219) - Part V - Winding Up Unregistered Companies (ss 220-229) - Part VI - Miscellaneous Provisions applying to Companies which are Insolvent or in Liquidation - Part VII - Interpretation for first group of parts - Insolvency of Individuals - Bankruptcy - Part VIII - Individual Voluntary Arrangements IVA - Part IX - Bankruptcy (ss 264-371) - Chapter I - Bankruptcy Petitions - Bankruptcy Orders - Chapter II - Protection of Bankrupt's Estate and Investigation of his Affairs - Chapter III - Trustees in Bankruptcy - Chapter IV - Administration by Trustee - Chapter V - Effect of Bankruptcy on certain rights, transactions etc. - Chapter VI - Bankruptcy Offences - Chapter VII - Powers of Court in Bankruptcy - Part X - Individual Insolvency: General Provisions - Part XI - Interpretation for second group of parts -Miscellaneous matters - Part XII - Preferential debts in company and individual insolvency - Part XIII - Insolvency Practitioners and their qualifications (ss 338-398) - Part XIV - Public Administration (ss 399-410) - Part XV - Subordinate Legislation - Part XVI - Provisions against debt avoidance (England and Wales Only) - Part XVII - Miscellaneous and General - Part XVIII - Interpretation - Part XIX - Final Provisions - Schedules - Schedule B1, on the new administration procedure after the Enterprise Act 2002
An IVA lasts 5 years or more. An IVA will typically last for 5 years, which may be extended or failed at any time by the supervisor if the circumstances arise. This could mean you facing the possibility of bankruptcy some years down the road after the IVA has been put into place.
That is why it is important to be absolutely sure that an IVA is suitable and can be completed with confidence. A lot can happen in five years, such as job loss.
How long does an iva last? In some circumstances, if you are able to offer your creditors a lump sum in settlement of your debts, an IVA can last for less than 5 years. This can either be via a windfall, third party assistance or more commonly by sale or remortgage of a property.
Full and Final Settlement IVAs are where a lump sum is offered to creditors in settlement of a debt upfront. These tend to last no more than three months.
An IVA can last longer than five years if you need to make up for missed or reduced payments or if your proposal states that the IVA must be extended if you are unable to release any equity at the end of the fifth year.
An IVA is an acronym for Individual Voluntary Agreement and defines the fixed term repayment plans for people who are in certain kinds of serious debts. IVA allows the easy debt payments to the creditors, meanwhile protecting the assets to put under the threat of legal action and bankruptcy.If you happen to be in need of catering to the services of an IVA you can follow the following steps required for implementing the services of the IVA:
Step One Analyze implication of IVA and find out whether it suits you or not. For this you have to appraise yourself thoroughly about the IVA methodology and its advantages and disadvantage. Take the opinion of your debt advisor who will be in a better position to guide you in the matter. Proposing IVA requires you to engage Insolvency Practitioner who will be recommended by your debt advisor or the IVA firm.
Step Two It requires you to present your case with details of your financial circumstances, such as, state of affair, your earning, family expenses, assets, debts etc. Your living expenses will determine your amount of repayment to your IVA every month; meanwhile, your debt advisor will help you in assessing your IVA living expenditure budget.
Step Three This is a most crucial part since it deals with the documentation and the drafting of IVA Proposal, which will serve as a formal legal document detailing your financial circumstances and the proposed amount of repayment that you will make to your creditors in an IVA.Prior to submission of the proposal submit your financial statement, debt balances, salary slip, past business account and bank statement.
Step Four Require you to meet your creditors to discuss your IVA proposal for reviewing. The creditors if needed may propose some same changes in the draft proposal which you are required to discuss with your IP. However, in the absence of consensus the other debt management solution may be chosen.
Step Five Now you have reached the final stage. Once the IVA Proposal has been accepted it becomes the legally binding document for both the parties that are creditors and the debtors. You are obliged to follow all the terms and condition of the IVA and any breach of the terms will result in failure of the IVA. Beside this, your creditor may declare you bankrupt, since it's extremely strict with its terms and conditions.Once the remaining debt has been written off and completing the IVA you are absolved from all your liabilities.