|
|
|
Below you will find all the questions and answers you may have with regards to debt help. If you should not find the question and answer below please click here and let us know. | |
 |
| Q. | Is a Voluntary Arrangement Right For Me? |
| A. | Since June 2002, the regulators have required insolvency practitioners (IPs) to give this guidance leaflet to people thinking about making an individual voluntary arrangement (IVA). It aims to help you understand what is involved before you commit yourself..... |  |
| Q. | What is an Individual Voluntary Arrangement (IVA)? |
| A. | An IVA is a contract between you and your creditors. You pay an agreed monthly sum, usually for 5 years. This is divided up between your creditors, who accept the sum in settlement of the amount you owe them. |
| Q. | So how much will I be required to pay? |
| A. | The monthly payment depends on your income and expenditure, and is agreed so that it will be affordable to you. A standing order authority will be set up and your first payment must be made within one month of work commencing on your behalf. |
| Q. | What sorts of people enter into IVAs? |
| A. | 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. |
| Q. | Are there any other options ? |
| A. | You could get all of your creditors to reschedule your debts, but this may be difficult if you have a lot of creditors. Some banks and building societies have debt counsellors, and you could try speaking to them. Bear in mind that unlike an IVA, an informal arrangement offers no guarantees. One or more of your creditors could change their mind at a later date, or charge you higher rates of interest later if your circumstances improve. You may also take longer to finally clear your debt. |
| Q. | What are the advantages of an IVA? |
| A. | We help you to calculate what you can afford.... | |
| Q. | What do I need to do? |
| A. | Before your IVA proposal is put to creditors you need to sign it as a "Statement of Truth". You do not need a solicitor for this: you simply read it and sign it. We prepare all documentation for you and also contact your creditors on your behalf (and if necessary we will make an application on your behalf to your local County Court for an "Interim Order").
A creditor meeting will then consider your proposal. You will not usually need to attend as typically most creditors do not attend, voting by proxy instead. Even if creditors do attend, the meeting usually only lasts for between 15 - 20 minutes. Someone from Debt Help Services will chair the meeting, and you need to be available at the end of a phone line during this period. |
| Q. | What else should I know? |
| A. | You might actually pay more out in an IVA than you would if you were made bankrupt. This is because bankruptcy income contributions usually only last for 3 years, whereas contributions in most IVAs last for 5 years. This voluntary increase in the total pa |
| Q. | Will my home be safe? |
| A. | You will not usually have to sell your property when in an IVA. If you do own your home, you need to take reasonable steps at the end of the IVA to make any equity available to your creditors (usually by re-mortgaging). This requirement is also true for bankruptcy, except that bankruptcy often means you do have to sell your home. |
| Q. | What if my creditors don't agree? |
| A. | At least 75% of votes (in value) at your creditor meeting must be in favour of your IVA proposal. Creditors can suggest modifications to your proposal and you can choose whether to accept them or not.
If your creditors don't vote in favour you will still have the option of an informal arrangement with your creditors, or of bankruptcy. |
1 | 2 | 3 | |
|
| |
.gif){kind=small}
