Debt Solutions
Individual Voluntary Arrangement (IVA).
An Individual Voluntary Arrangement (IVA) is one of the most widely used debt solutions in the UK. At PennyPlan, we guide you through the process so you understand how an IVA works, what debts it covers, and whether it’s the right choice for your circumstances.
What is an IVA?
An IVA is a legally binding agreement between you and your creditors to pay back what you can afford of your debt over a set period of time, usually 5 years.
Your repayments will be based on what you can realistically afford to pay each month, taking into account your income, expenditure and any dependants you may have.
After your IVA is approved, all interest and charges are frozen.
Once you have completed your IVA, the remaining debt is written off.
This means that if you have £20,000 of debt and can only afford to repay £200 per month, at the end of your 5 year IVA term, £8,000 could be written off (40%).
What does an IVA look like?
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Subject to creditor acceptance. Payment subject to individual circumstances. Credit Rating may be affected. Fees apply, subject to individuals circumstances.
IVA Knowledge Base
Getting started with an IVA
The IVA process has a few stages before you enter an individual voluntary arrangement.
The first step in gaining debt advice is to find out if you qualify by taking our quick and free online assessment.
This gives both you and our advisors a brief understanding of your eligibility.
1
Financial Assessment
Once you have taken our brief assessment online, the next stage is to speak to one of our friendly advisors who will conduct a more in-depth financial assessment with you.
The assessment will include personal or financial information to help understand the best way to assist you. The assessment will also ensure that your household bills are taken into account, ensuring your repayment plan leaves enough money to stay up to date with such items.
The financial assessment also makes sure you have had the appropriate debt advice, making you aware of all solutions available to tackle your debt problems. It also gives you an idea of what your monthly payments could be.
2
Documents to support your IVA
If both you and the advisor agree that an IVA is the right solution for you, then the next stage will be to gather documentation to show creditors you do need the financial support an IVA brings.
It will also prove to creditors you can make the repayments proposed in the arrangement. After all, this plan is designed to help you get your finances back on track so you can become debt free.
Documentation needed to support the IVA application vary based on your own circumstances.
However, some documents are usually standard across all individual voluntary arrangements.
Now you are probably thinking, it is going to be an effort to gather everything I need!
Do not worry, our market-leading technology help make the process as easy as possible for you. With a few clicks of a button, you could have all the documentation you need sent directly to your account with us.
The documentation needed for most IVAs includes:
- Proof of income
- Bank statements (Proof of expenditure)
- Identification
- Evidence of debts included within the IVA
Our software can help you send these items to us with a few clicks, so do not feel overwhelmed!
3
IVA Proposal
Once we have all the documentation, it is time to start putting together your IVA proposal to send to your creditors.
This is the contract we send to the people you owe money to, which will form the basis of your IVA.
It will include items such as your monthly payments, length of the IVA and any other conditions that have been agreed upon.
4
IVA Creditors Meeting
Once your IVA proposal is finalised and you have signed it, it is now time for us to send it to your creditors for their approval.
More often than not, there is not an actual IVA creditors meeting, and it is used more as a deadline for creditors to get their votes in.
For your IVA proposal to be approved we will need to ensure 75% of voting creditors agree to the terms.
5
IVA Approval
Congratulations! You have now entered an IVA and have a clear, sustainable plan toward debt freedom.
Your chosen company will now act as an IVA supervisor for your arrangement. They will now manage your IVA on your behalf for the duration of its term.
You will make your first monthly payment once your IVA is approved. We then contact all your creditors on your behalf to inform them you have started your IVA.
As long as you maintain the terms of your IVA agreement, you have a clear timeframe of when your debt will be repaid and the remainder written off.
Once you have made your final payment, the remaining debt is wiped and you are debt free!
Learn more about IVAs
Can you get a mortgage with an IVA?
IVA Meeting Of Creditors – What to expect
What people say...
Other Debt Solutions available
Frequently asked questions about individual voluntary arrangements (IVA)
Why would a creditor refuse an IVA?
If your creditors believe that they would get a better return by making you bankrupt, then they may refuse your IVA proposal.
However, our insolvency practitioner will negotiate with your creditors to try and reach an agreement that is acceptable to all parties.
How long does an IVA stay on your credit file?
An IVA will stay on your credit file for six years.
Once the IVA has been completed, you will be able to start rebuilding your credit score by making all future repayments on time and in full.
What are the restrictions of an IVA?
– Unable to obtain credit for the duration of the IVA
– A marker on your credit file for six years
– Your name will be published on an Insolvency Register
Are IVA's registered?
Each individual voluntary arrangement (IVA) is registered with the insolvency service.
Your Insolvency Practitioner will provide you with a case reference number, which can be used to locate your IVA on the individual insolvency register. This can be beneficial if you need to provide evidence of your IVA to creditors or financial institutions.
I have an IVA with another provider, can I transfer it to PennyPlan?
Unfortunately, you will not be able to transfer your current IVA to PennyPlan.
You will need to contact your current insolvency practitioner to discuss your options on how to ensure your arrangement comes to a successful conclusion.
What does an IVA cover?
An IVA covers all your unsecured debts, which includes any money you owe on items such as credit cards, personal loans or overdrafts.
It does not cover any secured debts, such as your mortgage or car loan.
Is an IVA better than a Debt Management Plan (DMP)?
Every persons financial circumstances are unique.
Compare IVA and a Debt Management plan with our in-depth comparison article. This will help you make a more informed decision to which debt solution is best for you.
What happens if my IVA gets rejected?
At PennyPlan we provide plans to cater to the financial circumstances of every household.
Don’t worry if your IVA is rejected, we will provide debt advice on other solutions such as debt management plans, or even possibly re-proposing your IVA to creditors with improved terms.
Can I get another IVA if one fails?
If an IVA fails for whatever reason, it is possible to enter a second arrangement.
However, there must be clear evidence as to why you feel that the new IVA will be more successful than the previous.
There could have been numerous reasons as to why your IVA failed such as loss of job resulting in no income or a relationship split between a couple entered into a joint IVA.
Whatever the reason, we would need to explain why the IVA will have a better desired outcome not just for you, but for creditors also.
Do most IVAs get accepted?
We cannot speak for every insolvency practitioner, however over 95% of our proposed IVAs are accepted by creditors.
This is because our team have many years of experience in liaising with creditors, understanding their voting habits and what they wish to achieve from individual voluntary arrangements.
Our debt advice team also have a very successful track record in negotiating on behalf of our clients to ensure that the terms of the IVA are acceptable to all parties.
What is an IVA advisor?
An IVA advisor is the member of our team who will assist you in understanding the options available to you in resolving your debts.
They will help you assess your financial situation, and the documents required to proceed with the option you feel is best for your circumstances.
