What is and Individual Voluntary Arrangement (IVA)

An IVA or individual voluntary arrangement is an agreement, set up by an insolvency practitioner, that allows someone to pay back creditors in agreed amounts over an agreed period of time. This is an arrangement between an individual and their creditors that is approved by the court and the creditors.

An IVA - individual voluntary arrangement - is an alternative to bankruptcy. It is a legally binding contract between a debtor and their creditors.‍

You can enter into an IVA even if you’ve already been made bankrupt, and if you are self-employed and your business is viable, you can continue to trade.

How Do I Know if an IVA is Right for Me?

We will provide a no-charge review of your financial affairs so that together we can decide what you can realistically pay back each month.  If an IVA is the most appropriate course of action then we will recommend a formal proposal to your creditors.

If the proposal is approved your debts will be frozen and no more interest or charges can be made against you.  Provided you maintain payments, your unpaid debt will be written off at the end of the IVA, which normally lasts for 60 months.

Benefits of an IVA

• You keep control of your assets and certain assets can be excluded from the IVA (although full disclosure is required)
• You get protection from your creditors (if necessary an Interim Order application can be made)
• The costs are generally lower than bankruptcy, maximizing the return to creditors
• Frost Group will be the point of contact for your creditors, freeing you from the stress of debt collections, red letters and aggressive telephone calls
• You make one affordable monthly payment in respect of all your debts
• Creditors could agree to being paid as little as 25% of the debt, with the balance being written off upon the successful completion of the IVA.

Is an IVA suitable?

An IVA may be suitable if you:

• Owe £20,000 or more
• Have unsecured creditors (e.g. bank loans, credit cards)
• Are employed or receive a regular monthly income
• Have a surplus at the end of the month (if you weren't trying to service your unsecured debts).

How an IVA works

1. A meeting with our insolvency for an initial assessment of your assets and liabilities, together with your monthly income and expenditure
2. If your circumstances are suitable, we draft an IVA proposal and our role is known as your "Nominee"
3. The IVA proposal is then circulated to your creditors and a creditors meeting is held – normally creditors vote by proxy instead of attending
4. Providing more than 75% of your creditors vote in favour, your IVA will be accepted
5. Interest on your debts is frozen from the date of acceptance of your IVA
6. Our role as nominee changes to "Supervisor", making us responsible for policing the IVA. Our duties comprise collecting the monthly contributions, reporting to creditors and assessing your income and expenditure on an annual basis

Self-employed?

IVAs can be suitable and successful for self-employed individuals. We help you prepare cashflow forecasts to ascertain whether an IVA is suitable.

If HM Revenue & Customs (HMRC) is a creditor, we can assist you with submitting overdue tax returns and negotiating with HMRC. HMRC has a specialist department dealing with IVA proposals and has a track record of supporting them.

IVAs and your home

An IVA protects your property from any legal action being taken by your unsecured creditors, but you do remain responsible for your mortgage and/or any loan secured over your property.

In most circumstances, an IVA will require your property to be revalued in the fifth and final year and for the equity to be calculated. You will only be expected to make the equity available to your creditors if the equity is greater than £5,000 and/or you can obtain a re-mortgage of less than 85% loan to value.

If you cannot secure a remortgage, the duration of the IVA can be extended by 12 months to allow monthly payments to be made in respect of the equity.

We can also help with negotiations if you are a tenant and have rent arrears of landlord concerns.

Choosing Frost Group

We know the stress that debt can cause and offer you bespoke advice and a personal IVA support service. We will look after your IVA from start to completion in a professional manner, and ensuring it runs as smoothly as possible.  

We give a free, no obligation initial consultation. If an IVA is suitable and you appoint us to manage it for you, our typical charge for acting as your Nominee is £3,000, which is paid from the contributions you make into the IVA. The Supervisor is usually paid a percentage of realisations, typically 15%, although he may be paid on a fixed fee or time and costs basis.

If you want honest and clear debt advice and are thinking of using an IVA  to avoid bankruptcy, speak with Jeremy Frost.

The above video will hopefully answer any questions you may have about IVA's, but as this is such a personal issue to you, perhaps you would find it more beneficial to have a brief chat on the telephone or perhaps a face to face meeting. Whatever, you decide, you can be assured you are dealing with professional regulated Insolvency Practitioners who will take you and your debt problems seriously. All phone calls and initial meetings are in confidence and are free of charge.

Informal arrangements

We are one of the few Insolvency Practices to hold FCA - Financial Conduct Authority regulation which means we are authorised to assist you with dealing with your personal debts outside of a formal insolvency procedure.  Not all Insolvency Practitioners are regulated to do this and we are proud to uphold the robust standards required of us by the FCA.

If debts are taking over your life we can negotiate with your creditors to reduce monthly payments to amounts which you can afford.  Our informal arrangements are not debt management plans and all initial advice is free and completely confidential.

We have built up an excellent rapport with credit providers and are often able to get your interest and charges frozen, and depending on your circumstances, some of your debt can be written off too. There are no upfront costs.

Most importantly we can help you manage your debts without the need to add to them with another loan.  Once we get your finances back in order, you will be able to get your life back in order.

Our informal arrangement service is available nationwide from our offices in Croydon and London. We take pride in offering bespoke and professional advice and know the damage and stress that debt can cause.