How do I apply for an IVA?
When you reach a level of debt that you feel is unmanageable, you should take advice from a debt charity advisory service or contact us here at Personal Debt Solutions. You will be able to discuss your situation with us and if an IVA is suitable for you, we will start to put a proposal together to put to creditors based on the information provided to us. Once the proposal has been accepted by 75% of your creditors by value, you will be entered into your IVA which will
usually last for five years.
How do I know that I am eligible for an IVA?
You will usually be eligible for an IVA if you are struggling to pay substantial levels of debt to a number of unsecured creditors. You will also need to have an income which would allow you to make monthly repayments for your debt. The best way
to find out if you are eligible is to get in touch with us.
What debts are included in an IVA?
What debts cannot be included in an IVA?
Secured debts from your bank, such as a mortgage, or a secured lender will not be included. Other debts that cannot be included in an IVA include student loans, fines and child maintenance arrears. For any queries on this, contact us.
How long does an IVA affect your credit rating?
Who do I need to tell that I am in an IVA?
Your unsecured creditors will be notified when your IVA application is made. You may also need to inform your employer if you work in certain professions such as the police.
Are there any sectors I may not be able to work in with an IVA?
Usually you will not have to inform your employer but there may be some sectors where you may have to inform your employer of an IVA. You should check your employment contract to see whether it is necessary to inform your employer or not.
Do I need to go to court?
No, there is no need to attend court when applying for or during the IVA process.
Will creditor pressure keep happening?
An IVA will put a stop to creditor pressure from unsecured creditors included in your IVA. Those creditors who cannot be included will still be able to threaten you with legal action if you do not pay them. If you find yourself in this situation,
get in touch with the insolvency practitioner (IP) handling your IVA to discuss your options.
Arrange a loan or credit?
In an IVA you will have committed to pay into the scheme an amount that you can afford to meet existing debts. For this reason you are unlikely to have sufficient
surplus cash available to take on additional commitments for the duration of the IVA. For the same reason it would not be practical to apply for a mortgage as additionally a deposit would be required.
Can I get a credit card?
When you are in an IVA, you will not be allowed to borrow more than £500 without the permission of an IP who is acting as supervisor. Lenders will be wary to lend to you and as a result, you may find it difficult to obtain the credit you are asking for.
Lenders will be unlikely to provide you with more unsecured debt in addition to the debt included in your IVA and any secured debts, such as mortgages, you may have. If you borrow more than £500 or you borrow without the permission of the supervisor you will be in breach of the terms of your IVA.
Can I transfer to bankruptcy?
You can transfer to bankruptcy if you are struggling to make your monthly IVA payments and you fit the criteria of bankruptcy. You should get in touch with the IP handling your IVA to discuss the possibility of this. Also, if you cannot afford to make the monthly repayments or you no longer meet them, you are likely to be made bankrupt under the terms of your IVA.
Can I add any new debts to an IVA?
You can only add further debt to your IVA if the debt was built up before you entered into the IVA. Usually the IVA proposal will have a clause in it which allows you to add a new debt, subject to creditor approval. The debt should not change the monthly contribution by more than 10%.
You can add additional debts into an IVA where they were understated or forgotten. These are usually referred to as “unknown creditors”. Such debts can be included at a later date without having to resubmit your proposal and without creditors having to vote again. However if an unknown creditor is not happy he can apply to the court within 28 days to challenge the IVA.
Can my partner and I get an IVA together for joint debts?
No, there is no such thing as a joint IVA. You would have to get separate IVAs that would be arranged simultaneously and any unsecured joint debts you have will
need discussing with the IP when you first get in contact with them.
Can I go on holiday in an IVA?
There is nothing to stop you going on holiday when you are in an IVA particularly if this has been paid for by someone else, arranged before the IVA procedure or is a gesture of goodwill from a friend/relative to stay in their holiday property.
If you are contemplating booking your own holiday while in an IVA, it is worth getting in touch with your IP for advice.
Can I emigrate?
This would be something to be discussed with the IP handling your IVA. Questions may be asked about why you are emigrating and it is advisable not to proceed without discussing this first.
What if I have an ISA, stocks, shares etc.?
These will be taken into account when you make your IVA proposal and creditors will probably feel that you should use any savings or profits in the IVA to pay them the money that they are owed.
What if I get a pay rise whilst in an IVA?
You should inform your IP and depending on the size of the increase could result in an adjusted contribution.
What if I get a new job and the benefits package includes a car?
Inform the IP handling your IVA to discuss the best options in this situation. Do you need a car as part of your benefits package?
What if I receive a windfall or inheritance whilst in an IVA?
Again, inform the IP handling your IVA as soon as possible.
What if I’m offered a job or promotion abroad?
Discuss with the IP handling your IVA if this is a viable option for you currently and act on the advice of the IP.
What if I have an accident and can no longer work when I’m in an IVA?
Inform your IP and your creditors straight away if this happens. They will work with you to find a solution that works best for you and them going forward. You may be able to lower the payments to an amount you can afford, lengthen the IVA term
or enter into bankruptcy.
What if I need to reduce the amount I pay monthly due to redundancy or any other major life changes?
Discuss this with the IP handling your IVA and your creditors. Creditors are usually open to this if you let them know as early as possible about your current situation. The IVA term may have to be lengthened in order to accommodate.