IVA’s & Trust Deeds - IVA Help & IVA Advice ?

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* IVA's (Individual Voluntary Arrangement) - A formal alternative for individuals wishing to avoid Bankruptcy

An IVA uk (Individual Voluntary Arrangement) is an agreement with your creditors to make a single reduced payment each month which lasts for a sensible period of time (normally 5 years). Once agreed, creditors are not allowed to add further interest or charges to your accounts by law. And the agreement is fixed – which means no more unnecessary charges.

The arrangement is governed by the Insolvency Act of 1986. A common misunderstanding is that people think undertaking an IVA uk is like going Bankrupt. This is not the case. The IVA uk is specifically designed to avoid the many issues and stigmas surrounding Bankruptcy.

Advantages of an IVA uk

1. Most creditors will recognise that they must accept a lower payment rather than the whole amount owed.
2. There isn't the same stigma or publicity that accompanies bankruptcy.
3. A business can continue to trade.
4. You don’t suffer from the same restrictions as bankruptcy.
5. Costs should be lower than bankruptcy for both parties, enabling higher payments to your creditors.
6. The debtor, via the insolvency practitioner, would be involved in the choice of assets made available to the creditors as any arrangement is designed to suit the debtor's situation. As long as the creditors are no worse off if you were to go bankrupt this is more beneficial to all parties.
7. If some creditors vote against the IVA uk the other creditors are still bound by it as long as 75% of the debt owed is agree by the other parties.
8. You can still have a current account as long as you do not have an overdraft.         

Disadvantages of an IVA uk

1.  It is usually only suitable if you have unsecured debts of at least £15,000.
2. To have an IVA uk accepted at least 75% your debt value must be agreed, as well as a simple majority of your creditors.
3. IVAs usually last for five years and payments are typically higher.
4. Your home and assets can still be at risk if the creditors decide not to exclude them.
5. Should the IVA uk fail, you can still be made bankrupt. In this case the costs of the IVA uk will be added to the debt.
6. The insolvency practitioner will closely supervise you.
7. Your credit rating will be affected.

Remember; Failure to abide by the terms of the IVA uk can lead to bankruptcy Your credit rating will be impaired for six years. Fees are payable (nominee and supervisory fees) which are taken out of the monthly payment. These will reduce the amount of money that is paid back to creditors. If you are a homeowner with sufficient equity, they may be required in year 4 of the IVA uk to release some of the equity (for example by obtaining a re-mortgage) to pay back some or all of the remaining debt. 

* Trust Deeds (Scotland only)

A Trust Deed is a legal process available only to residents in Scotland. It offers people in debt an alternative to bankruptcy. 

If you struggle to repay your debts, our partners can establish a monthly repayment based on what you can afford to pay. Your Trust Deed will last for a period of usually three years. When this comes to an end, any remaining debts are written off! Your trust deed is supervised by a licensed insolvency practitioner, who is responsible for all negotiations with your creditors and who is also responsible for ensuring that you keep to the terms of the Trust Deed.

Advantages of a Trust Deed

1. The trustee handles all correspondence from creditors, taking away some of the pressure and stress of dealing with your debt.
2. Information about the Protected Trust Deed is not published unlike bankruptcy.A Protected Trust Deed costs less to administer than bankruptcy and is usually more flexible. Protected Trust Deeds normally last 3 years, after which any remaining debt will effectively be written off.
3. A Protected Trust Deed prevents your creditors from adding additional interest, charges, and taking any further action against you.
4. You will in most situations be able to remain self-employed and continue to act as a director of a company.  

Disadvantages of a Trust Deed 

1. Entering into any arrangement with your creditors can affect your credit rating.
2. You unable to be a company director of a limited company unless the company’s article of association states otherwise.  
3. The arrangement is binding on you as well as your creditors.
4. If you were to default on the arrangement then the Insolvency Practitioner can petition for your bankruptcy.
5. Creditors are not obliged to accept a proposal for a Trust Deed. However, the Trustee will negotiate with all your creditors. Unless creditors, who are owed more than one third of the total debt object the Trust Deed will become protected.

How can an IVA help me?

Getting IVA help or IVA advice can help you mange your debt over a fixed period of time. By speaking to a qualified IVA adviser (Insolvency Practitioner - IP) offering IVA help or IVA advice they will be able to run through the different options with you  giving the IVA help and IVA advice you need.  Once they have recognised you need IVA advice or IVA help they will set up a meeting with your creditors (a creditors meeting) to put in place a suitable plan of action.

The IP will be available to speak too offering you IVA help and IVA advice throughout the term of your IVA. If ,at any point you require further IVA help or IVA advice they will be able to assist you as and when you require it. 

IVA Debt? - Debt Management Companies can help!

Having IVA debt can be a worry for any individual or family. However if you can get IVA help about  your IVA debt  from a debt management company they will be able to assist you and explain the advantages and disadvantages of an IVA (Individual Voluntary Arrangement) or Debt Management Plan (DMP). 

IVA debt can be asset at by a qualified Insolvency Practitioner (IP) or IVA company who will be happy to look at your IVA debt and offer IVA Help or IVA advice.