Your frequently asked questions about the benefits of an IVA answered here in detail.
You may have read about the advantages and disadvantages of an IVA, now we've answered your IVA queries in more detail - does an IVA guarantee to write off some of your debts? Will interest and charges definitely be frozen? What happens at the end of the agreement? Read on to find out the answer to all of these questions.
If your IVA question hasn't been answered below, you can pose your questions to the ClearDebt Community by completing for the form at the bottom of this page.
The questions can be categorised by the following:
Facts you need to know about how an IVA works
Benefits that will help ease the current pressures you may be feeling whilst trying to pay back your debt
Be aware of important issues which may affect your relationship with creditors, pending court action, your credit rating and lifestyle.
It can - this depends entirely on our assessment of your ability to repay. More typically we cut people's debts in half (if they complete the IVA). We do achieve a 70% write-off (or better) in around one in five cases. You must keep to the terms of the arrangement and all your debts must be included in the proposal. Unlike debt management schemes, an IVA is a once and for all settlement of your debts (excluding mortgages and secured loans).
The IVA application involves our team working out with you exactly what you can afford to contribute in one monthly payment to us, after your essential expenditure has been taken into account. We then distribute this payment to your creditors.
It's vital you include all your debts in the proposal. Any excluded creditors could challenge the validity of the arrangement if they believe that there has been unfair prejudice. However if you have inadvertently missed a creditor off your list, that creditor will still be bound by the IVA (unless they were owed 25% or more and wanted to vote against your proposal).
Once the arrangement is successfully finished, your debts are written off permanently.
This would depend on the duration of your proposed IVA, most commonly IVAs do last 5 years but we cannot guarantee this (if you have missed payments), or are not able to remortgage and therefore offer up to 12 payments in lieu of equity.
Changes to the timings of your completion date can sometimes come into effect if you are unable to make your monthly contributions for a while due to a change in personal circumstance. It's important to note that although you will be debt free at the end of the your IVA, your credit rating could be affected for another year.
Read more about this in our FAQ on the duration of an IVA.
Yes. One of the key advantages of an IVA is that it binds your creditors, legally, to freeze all future interest on your debt. This means your debt level will not increase more than the amount you start your IVA on. The only exception to this rule would be if you are unable to make or keep up with your contribution. If this does happen, through no fault of your own, we are often able to agree a possible variation with your creditors.
Yes, as long as you have not been discharged from bankruptcy. It is possible to annul a bankruptcy and enter into an IVA if it is more appropriate.
Also once the IVA is in place, you are protected from further recovery action by the creditors scheduled in the IVA and court action will be dropped.
Yes, although we recommend that you contact us as soon as possible. We would apply to the Court for an "Interim Order", which is a request to suspend all legal action until the result of the creditors meeting is known.
It does, however, should you miss payments this will have to be reported to your creditors and they will then decide what action to take.
This will affect your ability to get credit once the IVA is completed.
As long as the terms of the proposals have been fully carried out, your creditors will have no further claim against you and the balance of any unpaid debts is written off. You will be provided with documentation to confirm that you have satisfactorily completed the IVA and a report will be sent to your creditors.
Yes - absolutely. We understand how stressful dealing with creditors can be if you are in debt to them. We will help handle any creditor relations we can on your behalf to help relieve any pressures for you.
We can also reassure you that once the IVA is in place creditors and debt collectors can't legally pursue other routes to debt repayment from you. Read more in our FAQ about IVAs and Creditors.
If your question has not been answered here, you can ask the your own question on the ClearDebt Community.