Individual Voluntary Arrangement

Questions Answered

Which debts can be included in a IVA?

The following are the type of debts that can be included in a IVA. Unsecured bank accounts & overdrafts, unsecured loans, credit or store cards, VAT & Tax, outstanding hire purchase shortfall payments or mortgage or secured loan shortfall payments due as a result of repossession.

You must however keep up full contractual payments on secured debts and other priority debts (see below), an allowance for which will be made in your expenditure schedule.

The following type of debts can not be included in a IVA. Mortgage & loans secured against your home, hire purchase agreements unless they relate to shortfalls. Court fines including parking and speeding fines. debts incurred through fraudulent activity, maintenance and CSA arrears and rent arrears applicable to home you currently reside.

What happens if I am unable to maintain payment of monthly IVA contributions? It's important to keep up payments as defaults can result in the failure of the IVA and may lead to bankruptcy.

What happens if my financial situation improves during the IVA? The Supervisor will undertake an annual income and expenditure review to ensure the monthly payments still reflect your surplus income. You should also be mindful that if you earn additional monies i.e overtime, bonus, pay increase over and above what has been provided for that most IVA’s include a clause requiring to surrender 50% of additional monies for the benefit of creditors.

What if I receive a windfall during my IVA? Your IVA will include a 'windfall' clause. Any assets, including lottery wins, bonus payments, gifts or inheritance have to be declared to the Supervisor and paid into the IVA for the benefit of the creditors.

Will my partner be affected by my IVA? An IVA is as the name suggests, individual to you. However if any of the debts were taken out in joint names, the other party will also be fully liable for that whole debt.

Your own liability for the joint debt will be taken care of by your IVA; however, the creditor can also pursue the other party for the full outstanding amount whilst your IVA is in place. Once your IVA has completed, the other party will remain liable for any remaining outstanding debt.

Who will find out about my IVA? Is it Confidential? Unlike bankruptcy, IVAs are not published in the local newspaper. Your IVA will however be noted on the Insolvency Register, held by the Insolvency Service. Any member of the public can access the Insolvency register via the Internet. Approved IVAs are also published in Stubbs Gazette, a magazine that can be requested by Insolvency Practitioners, finance companies and banks etc. It would also be fair to say that a number of companies access this information for marketing purposes.

What will happen to my pension? Your state pension won't be affected by entering into an IVA, however your personal pension payments may be. Creditors may vote with a modification asking you to suspend payments to a personal pension for the duration of the IVA. Not all pensions allow a five year suspension of payments, so if such a modification is proposed, your Supervisor will request a copy of your Pension Terms to see if this applies to you.

If you are able to comply to such a modification and there is a very good reason for you to continue contributing into your pension, it may be possible for the Supervisor to negotiate with the creditors on your behalf to find a compromise.

What happens if I have equity in my property? If you own a property, creditors would expect a proportion of any equity to be realised and paid into the IVA towards the end of the arrangement. This might be arranged through a re-mortgage or by making additional payments into the IVA.

Can creditors continue to chase me when I am in an IVA? creditors continue to chase me when I am in an IVA? No, an IVA is legally binding as long as you keep up payments and co-operate with the Supervisor when asked to do so. Once an IVA has been accepted , your creditors have no legal right to pursue you outside of the IVA, so letters and phone calls should stop.