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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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31) Can my arrangement be brought to an early conclusion ?

Yes, a meeting of your creditors can be convened to offer a sum of money in full and final settlement of your obligations under the IVA. The sum of money could be raised by:

  1. Re-mortgaging your property.
  2. Funds from a relative or other third party.
  3. Cashing in life insurance policies (Subject to you obtaining expert investment advice).

Creditors are likely to agree to accept a lump sum to bring the arrangement to an early end if you can show that you are paying creditors as much as you can afford.

32) What sorts of people enter into IVAs ?

Simply people who cannot pay their debts. If you cannot pay your debts as they fall due, you are insolvent and the law gives you two alternatives – bankruptcy or an IVA. IVAs are entered into by a wide range of people with a common problem – they cannot pay their debts.

33) What happens at the end of the agreement ?

As long as the terms of the proposals have been fully carried out, your creditors will have no further claim against you and the balance of any unpaid debts is written off. You will be provided with documentation to confirm that you have satisfactorily completed the IVA and a report will be sent to your creditors.

34) Can I stay in business ?

Yes, you can. IVAs have helped thousands of sole traders remain in business when faced with severe financial problems.

35) Can I enter into an IVA if I have already received a Statutory Demand ?

Yes, although we recommend that you contact an Insolvency Practitioner as soon as possible.

36) Do I have to meet the Insolvency Practitioner ?

You don’t have to, but we appreciate that entering into an IVA is a big step and that many of our clients will want to meet the people who are dealing with their affairs. That is why we will always offer the opportunity for you to meet one of our representatives.

37) What if I fail to keep up the agreement ?

If you fall into difficulty and are unable to make the payments to your IVA, it is possible to agree a payment holiday with your creditors via ourselves. The months which you miss will normally be added to the end of the agreement.
If during the period of your IVA your circumstances change for the worse, perhaps you change your job and earn less money, you may find that you cannot maintain the agreed payments. In these circumstances, the IP can ask your creditors if they will agree to vary the terms of your proposals. If up until that time, you have maintained your payments without problem, your creditors may be mindful to accept such changes.

Note, if you are unable to re-start your payments at all, it is likely that the IVA will fail. Your creditors will then be able to take other action against you and alternative arrangements must be made.

38) What are the Disadvantages of an IVA?

  • Possible release of home equity.
    If you have equity in your property, or any anything else of significant value. You may be required to release some or all of this as part of the IVA agreement. Please call us if your require more clarity on this.
  • Minimum debt and monthly repayments exclude many people.
    Normally can only do an IVA if your unsecured debt is more than £15,000 and you can afford a monthly payment of at least £200.
  • No unsecured borrowing.
    While you are in an IVA, you will not be able to use store or credit cards. You will normally not be allowed to borrow any more money until you have successfully completed your arrangement. It may however be possible to change an existing mortgage or take a new one while you are in an IVA.

39) What if my circumstances change and i can afford to make increased payments during the IVA?

During your IVA, regular reviews of your circumstances and ability to maintain your monthly payments will be undertaken by you advisor. This is normally once a year. If it is agreed that your circumstances have not changed, then you will continue to make your monthly IVA payment as normal. If however your circumstances have changed for the better, you may be asked to increase your monthly payments accordingly.

40) What if my circumstances change and i can’t afford agreed payments?

If you fall into difficulty and are unable to make the payments to you IVA (e.g. you loose your job or have a bad month), it is possible to agree a payment holiday with your advisor. Missed payments are normally be added to the end of the agreement.

During the IVA your circumstances may change for the worse (perhaps you change your job and earn less money), you may find that you cannot maintain the agreed payments. In these circumstances, your advisor can ask your creditors if they will agree to vary the terms of your proposals. If up until that time, you have maintained your payments without problem, your creditors are likely to accept such changes.

Note, if you are unable to re-start your payments at all, it is likely that the IVA will fail. Your creditors will then be able to take other action against you and alternative arrangements must be made.

Disclaimer: The material on this website is for general information only and should not be relied upon make important decisions.