IVA - Frequently Asked Questions

Your creditors expect your partner to pay a proportion of the household expenses in the same ratio as your respective level of incomes, such that whatever is left over is also in proportion to your respective incomes. So, while they don't have to pay into the IVA, their income would be a factor in determining the level of repayment.

When the IVA proposal is prepared, the court is notified. This is usually sufficient to stop proceedings. If not, your advisor will write to the court and the creditors concerned on your behalf. Further steps can be taken if necessary.

Unlike bankruptcy, an IVA does not legally restrict your ability to hold positions such as a Justice of the Peace orTrustee of a School. However, there are certain restrictions in the case of a Company Director. It can be the case that it is written into a person's terms and conditions of employment then entering to an IVA results in dismissal, particularly if they worked in the area of insolvency or a position of financial responsibility.

Yes. During your IVA you have agreed not to obtain further credit. When your IVA is completed, it is likely to remain on the credit reference for a further year. During this time you will probably still find credit difficult to obtain. However, when your IVA concludes successfully, your credit rating is likely to be repaired more quickly than if it fails. Generally, you are better able to obtain credit once your debt problem has been resolved. When considering entering into an IVA, the last thing you should be thinking about is more credit. There are many lenders who will look at your ability to pay, and successful completion of an IVA, rather than just your credit file. A successfully completed IVA is a step towards demonstrating your commitment to getting your credit rating back on track.

Usually creditors do not attend the meeting, they vote by proxy, meaning they register their vote without being there. Only one need vote.

No. Anyone on an IVA will be subject to an annual review, conducted by the IVA supervisor. If your circumstances change during the IVA, then the terms of the IVA may be altered to take these changes into account. For example, an increase in income may result in IVA payments having to increase.

Typically 50% of any extra income not anticipated in the original IVA proposal will be required to be paid into the IVA. This will depends on personal circumstances; for example, the break up of a marriage or the arrival of child may impact household income, which would be taken into account.

Secured loans and items on Hire Purchase can't be included as part of an IVA.

The following debts cannot be included in an IVA but repayments must be taken into account then formulating the IVA proposal.

• Most educational loans post June 2004, these excluded from the Insolvency Act 1986.
• Rent Arrears
• Council Tax Arrears
• Any fine or penalties imposed by a court
• Any liabilities arising under an order made in a family or domestic court action such as CSA claims for child support.
• Any liabilities arising under a confiscation order made under:-
  S.1 of the Drug Trafficking Act 1986.
  S.71 of the Criminal Justice Act 1988.

An IVA is a repayment plan that allows you to make reduced payments to your creditors. This can only be done with unsecured debts. If you owe money which is secured against an asset, such as a mortgage on your home, and fail to meet the repayment obligations; your creditors can take various actions including forced sale of the asset. An IVA will cover your unsecured credit commitments such as: overdrafts, credit cards, store cards, personal loans etc

No, During the IVA, you will not be able to use store or credit cards. Also, you will normally not be allowed to borrow more money. It may however be possible to change an existing mortgage while you are in an IVA. This must be done under the supervision of your Insolvency Practitioner.

This is called a windfall, for example an inheritance or large bonus payment. Your IVA will usually include a 'windfall' clause requiring you to pay the money into the arrangement. In the event of bonus payments, or regular overtime, depending on their value, typically you will be required to share the benefit on a fifty-fifty basis with your creditors.