IVA Information

Introduction to IVA Information

An IVA is an individual voluntary agreement made between a debtor and their creditors. The IVA information was established under the Insolvency Act of 1986 and this act contains the specific rules and regulations that must be followed. Once the IVA is agreed upon it becomes a binding contract that cannot be changed by the debtor or the creditors. This is a good solution for those with a high level of debt but who want to avoid bankruptcy. An IVA can be written for individuals, soles proprietors and partnerships.

IVA Components

A proposal, that includes all of the IVA information, is sent by a licensed insolvency practitioner to all of the creditors that are to be listed in the IVA. After each creditor has had enough time to evaluate the proposal a creditor’s meeting is planned. At this meeting the creditors will discuss all of the IVA information to determine and agree upon the specific repayment terms. At this point, the debtor is responsible for repaying this set amount in the form of monthly payments that are spread over a set number of years.

There are two types of fees connected with IVAs but they are usually just added into the monthly payment amount that you owe. The first one is a nominee fee that is charged for the work that has been done up to the point of the creditor’s meeting, like meeting with you, contacting your creditors and writing the proposal. The other fee is a supervisory fee and is for payment for work that will be ongoing in the IVA like keeping track of payments and completing the necessary paperwork. These fees are usually paid to your licensed insolvency practitioner and he must have these amounts added into the IVA during the creditor’s meeting. This is an easy way to pay your licensed insolvency practitioner for the work that they have done and for future work.

IVA Benefits

The best benefits of IVA agreements are that they can be made without involving the debtor’s property. This will eliminate any risk of possibly losing your home, which many people consider a great benefit. Another great benefit is that once agreed upon, all of the creditors within the IVA must adhere to all of the IVA information within, like payment amount and payment terms. Your creditors will no longer be able to contact you in regards to your balance due. Some creditors do like to see if they can get more out of you and hope that you don’t understand all of the IVA information. This is another area that your licensed insolvency practitioner can help you with.

Entering into a IVA agreement does not stop you from obtaining other credit after the agreement has been created. This is unlike a bankruptcy order where the debtor is prohibited from applying for any new loans for so many years. You should be aware that no matter if you file for bankruptcy or IVA, they will remain on your credit record for at least six years. They will both also be listed publically on the internet.