IVA Knowledge Base
Common questions answered about IVAs.
If you have a query not covered here, please call us or submit a question for confidential advice about your own set of circumstances.
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More additions are being made on a daily basis.
1) Which debts can be included in an IVA ?
Normally, any unsecured debts can be included within an IVA. This inlcudes any overdrafts with your current bank and credit card balances.
In short, any service that your are no longer using, for which money is outstanding, has the potential for inclusion in an IVA proposal. For example, an outstanding bill for a disconnected mobile phone.
Personal debts to the Inland Revenue and VAT can also be included.
2) Which debts cannot be included in an IVA ?
Secured loans and items on Hire Purchase can’t be included as part of an IVA.
The following debts cannot be included, but “provisions” can be made within the IVA propsal. By provisons we mean, the fact they are outstanding and must be paid impacts your ability to repay your creditors.
- Council Tax Arrears
- Any fine or penalties imposed by a court
- Any liabilities arising under an order made in a family or domestic court action such as CSA claims for child support.
- Any liabilities arising under a confiscation order made under S.1 of the Drug Trafficking Act 1986 0r S.71 of the Criminal Justice Act 1988.
- Most educational loans, taken out after June 2004, as they fall outside of the Insolvency Act 1986.
3) Can I do an IVA without affecting my Property/House ?
In some circumstances your home may be excluded from the arrangement. However, if you have equity in your house, this will be taken into account when making an offer to creditors. You may have to release some of the equity in your property at some stage during the IVA.
Your creditors are only going to approve an IVA if they consider they will get more money back than via bankruptcy. If the equity in your property is more than your unsecured debts, then they could get it all back by bankrupting you, and forcing you to sell your home.
How your homeowner status effects yout IVA propsal is complex and depends on many factors such as
- Your current mortgage repayments.
- How much of the property is yours in the case of joint ownership.
- The amount of equity in the property.
We get more questions above homeowership and IVA than anything else, so please call us for free advice of how this may impact your decision to do an IVA.
4) How much equity will I have to release from my property?
There is no exact answer to this as it depends on personal circumstances. As a rule of thumb, equity is released such that increased mortgage payments once the IVA is completed are no higher than the IVA payments were.
5) I live in rented property – Will my landlord find out about my IVA ?
Your landlord need not be aware of the IVA.
6) Are you regulated ?
Our licensed Insolvency Practitioners are regulated by either:-
- Association of Chartered Certified Accountants (ACCA)
- Institution of Chartered Accountants of England and Wales (ICAEW)
- Department of Trade and Industry (DTI)
- Insolvency Practitioners Association (IPA)
Licensed insolvency practitioners are monitored regularly by their professional bodies. This ensures they are complying with the law and
ensures high standards are maintained.
7) How are debts with joint liability treated with respect to an IVA, when only one of the debtors is applying for the IVA ?
There is no simple answer to this. It is at the discretion of the creditors and dependent upon individual circumstances. The creditor involved will be able to pursue the other party.
8) Can I obtain an IVA if a bankruptcy order has been made against me ?
Yes, if you have not been discharged from bankrptcy. It is possible to annul a bankruptcy and enter into an IVA if it is more appropriate.
9) Can one individual creditor refuse to accept an IVA ?
One creditor can stop the IVA if they are owed more than 25% of the debts. If more that 75% of your creditors by value approve the IVA, then any dissenting creditors are bound by the arrangement.
10) Will the IVA stop my creditors from taking further action against me ?
Once the IVA is in place, you are protected from further recovery action by the creditors scheduled in the IVA.