IVA Knowledge Base 2017

IVA Knowledge Base

41) Do I have to tell my Partner or Spouse?

If none of the debts are jointly in your partner’s name, then you don’t need to tell them.
However, it is likely they will find out in the course of time, so we advise openness from the offset.

42) Why would a creditor allow my to write off a proportion of the money I owe and accept an IVA proposal?

The IVA must offer a higher return to creditors than could otherwise be expected if you were to be made bankrupt. Where contributions from income are being made, IVA’s are generally expected to be for a period longer than that in bankruptcy, i.e 5 years as opposed to 3 years. The 5-year period is often required by creditors in return for allowing the Debtor to avoid the consequences of bankruptcy.

43) I have just over £15,000 of debt – Can you help me write off 75%?

No. Normally, you must pay at least £200 for 60 months when on an IVA, meaning that you must be able to pay back £12,000 over 5 years. To be able to write off 75%, you would had to have had at least £48,000 of debt and be able to demonstate to your creditors you can only afford £200 per month towards your IVA. Much of the the advertising around IVA is very misleading in this respect.

44) Are the terms of an IVA always fixed for the duration of the IVA ?

No. Anyone on an IVA will be subject to an annual review, contacted by IVA supervisor. If the Debtor’s circumstances change while the IVA is in place, then the terms of the IVA may to altered to take these changes into account. For example, an increase in income may result in IVA payments having to increase.

45) Can anyone with debts over £15,000 apply for an IVA?

No, you must be technically insolvent.
There are two main tests of insolvency.

  • Your liabilities (debts) are greater than your assets.
  • You are unable to pay your debts as they fall due.

If you are concerned about either of these situations you should seek advice on your financial position, as a solution is often achievable if the problems are dealt with quickly.

46) How will the monthly IVA payments be made?

A standing order will be set up from your bank account to an account held by us that will be used to collect and monitor your IVA payments.

47) Why do some companies seem to offer IVAs for debts of £12,000 or even less?

There are 2 reasons for this:-

  • It’s just pure marketing. When looking for debt help, many people underestimate their debt by as much as 30%. So people thinking they owe just £12,000 often owe much more an do qualify for an IVA.
  • Most, if not all IVA companies have an agreement with a debt management company. If they get the details of a debtor not qualifying for an IVA, but suitable for debt management, then it make good business sense to either sell the lead or swap it for potential IVA cases.

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