Are you really on an IVA? Are you sure?

This page contains information about debt solutions available in England, Wales and Northern Ireland. Debt advice in Scotland involves similar but different solutions. Before considering an IVA as a debt solution, please make sure you fully understand the risks involved when entering an IVA.

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Working for a debt charity I often get asked questions from friends and family regarding problems with credit or budgeting. Like any specialist occupation, this is par for the course!

Twice in as many years I’ve come across friends of friends who believed that they were on an individual voluntary arrangement (IVA). However, when I’ve discussed the terms of the IVA, the agreement itself or asked any insolvency-related questions I’ve been met with a blank stare.

It soon became clear that my acquaintances were not in fact in a legally-binding insolvency arrangement; they were in fact on something resembling a fee-charging debt management plan (DMP).

They clearly believed that their debts would be written off after five or six years as that’s what the companies in question had told them. A quick search of the insolvency register proved that no such IVA existed in either case.

Happily the people under this misconception that they were in an IVA soon took free and impartial advice from us and their situations are now improving as a result.

What is an IVA?

Sadly, in my day-to-day job I still come across people who believe that they are in an IVA when they’re not.

So to clarify some issues these six things must happen for you to be on an IVA.

  1. An IVA is a detailed legal document.  You will receive a copy of it which you will need to sign and initial and return to the Nominee/Supervisor.  The legal document will contain details of all your assets and liabilities and a detailed income and expenditure budget. It will include details of any property, car, assets as well as details of all of your creditors.
  2. An IVA is overseen by a Nominee and approved by a Supervisor. A supervisor is a licensed Insolvency Practitioner and they will present your legal document to the creditors and oversee the IVA once it’s up and running.
  3. You will have a ‘meeting of creditors’. This will not be a physical meeting but a day and a time will be set when all your creditors will vote on whether to accept or reject your IVA proposal. You will need to be made aware of this date as the Insolvency Practitioner or their staff will tell you that the IVA is now legally binding.
  4. The IVA will have a set legal time frame between five and six years, depending on the individual details in the proposal.
  5. If your creditors agree, then legally they can no longer contact you or take any further legal action against you (although contact might continue for a couple of months after the IVA has been approved typically until the creditors update their records). All interest and charges on the debts will be frozen.
  6. If you have a current IVA, your name will be listed on the government’s insolvency register which can be found and searched online.

If you have been told you’re in an IVA and do not recognise any of the above you may be in a different type of arrangement. We’d recommend that you contact the company who are dealing with you in the first instance. You can always contact us for free and impartial advice.

Posted by in Living with debt