An Individual Voluntary Arrangement (IVA) is a legally binding agreement which you come to with your creditors whereby you agree to pay back a certain amount over a defined period of time. Both the amount you pay and the period of time will vary depending upon your circumstances. In the majority of cases an IVA lasts for 5 years and once the IVA has been completed successfully then you will be completely debt free no matter how much is still outstanding on the original debts.
IVAs can be broadly split into three categories as follows:
The consumer IVA is for someone who is employed and receives a regular wage each week or month otherwise known to be a PAYE employee.
We would know how much you will be receiving each month and can help you work out your monthly expenses. We can then fully analyse this information and calculate how much you can afford to pay into the IVA each month. As long as your circumstances do not change, usually after 5 years of paying each month into the IVA you will be debt free.
The business IVA is for those individuals who are sole traders, in a partnership, director/owner of a limited company, and you have a variable income each month.
We will work with you to produce a cashflow forecast so that we can firstly understand your business financial needs and secondly establish how much and when payments can be made into the IVA. The payment, amounts and timing of such payments are much more flexible than in a consumer IVA as we understand that there can be seasonality changes in the business which we will factor into the proposal.
Full and Final Settlement IVA’s
These are IVA’s which are dependant upon a lump sum being made available in order to provide a full and final settlement to your creditors.
The lump sum can vary, examples of these are from the sale proceeds of a property, a third party providing the funds, an inheritance, etc.
Should you require any advice on Individual Voluntary Arrangement’s live chat to us now (if we are online) or contact us.