Who can an IVA help?

November 4th, 2010 Admin Leave a comment Go to comments

Who can an IVA help? An Individual Voluntary Arrangement is a form of personal insolvency that can help borrowers repay what they can of their unsecured debts – and write off the remainder.

It works like this: the individual talks to an Insolvency Practitioner (IP), who’ll assess whether an IVA is the best way for them to tackle their debt problems. If it is, they’ll draw up an IVA proposal, which they’ll send to the unsecured creditors, so they can see if they approve of the proposed terms. If enough of them do, the IVA can start.

Depending on the terms of the IVA, they’ll probably spend the next five years paying as much as they can afford into the IVA. As long as they can uphold their side of the IVA all the way through, their unsecured creditors will write off the outstanding unsecured debt at the end of the IVA (the individual might have to release some equity from their property as well, if they own any).

Once that’s over, the IVA will still stay on their credit report for one more year – assuming it was a five-year IVA.

So, who can an IVA help? IVAs can help people who live in England, Wales or Northern Ireland if they can’t keep up with their payments to their unsecured debts but they think they can commit to making a smaller payment every month for the next 60 months.

That doesn’t mean it’ll be easy, though. An IVA takes real commitment and if they can’t stick to the terms it can fail, which means they might end up going bankrupt.

Still, IVAs are helping a lot of people. So far this year, over 25,000 people have entered an IVA in England and Wales. In fact, the figure from the last quarter was an all-time quarterly record – and the figure from last year was an all-time annual record.

IVAs are available from the IVA forum.

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