IVA

Please Note: Pompom only provide debt advice; we do not directly provide any financial solutions ourselves. We will talk you through your available options and if appropriate, we can offer you a no-obligation referral to a regulated debt solution provider, from whom we may receive a referral fee. Some debt solutions involve fees to you – these fees may differ based on the circumstances of your individual situation, but will always be explained to you by your chosen solution provider in writing before you decide to take up their service(s).

IVAs are designed to help people who are struggling with debt. They may have fallen behind on the repayments, usually to more than one creditor. This debt solution can allow you to renegotiate the terms of your loans, helping to make paying your debts become more manageable. Whilst your creditors aren’t obliged to agree to an IVA, they will usually consider it if the alternative option is bankruptcy. If you were to declare bankruptcy, they’d receive less of their money back.

When you get an IVA, you can include quite a wide range of debts, including:

Secured loans refer to debts that are secured against your property. If you can’t pay back the debt, your home or other assets can be taken away from you. Whilst it’s possible to include secured loans, as well as mortgage or rent arrears, in IVA debt, your creditors will need to give their permission. Unfortunately, they’re unlikely to do this since the only real motivation they have to agree to an IVA is that they may not be paid anything otherwise. If you have a secured loan, the lender may simply choose to take your property to recover their money.

If a debt comes to light once the IVA has been set up, you need to tell your Insolvency Practitioner (IP) right away. Legally, these creditors are referred to as ‘unknown creditors’. Many people are surprised to hear that the IVA is legally binding on creditors discovered later on. They are required to stick to the arrangement and are unable to take any action against you to recoup their money. Some of your monthly IVA debt repayment will go to them. If they’re unhappy with the arrangement, they have 28 days to apply to the courts to challenge the IVA.

There’s no minimum or maximum level for IVA debt. However, it’s important to keep in mind that since fees can sometimes be high, an IVA may not be the right option if your debt owed is less than £10,000. Other debt solutions may be more appropriate for your solution. There’s also no limit on how many different debts you can place on to an IVA. Although, an IVA really is better suited to those who owe money to more than one lender.

If you have debts that aren’t included in your IVA debt, you need to make sure you’re able to repay them alongside your IVA repayments. If you’ll struggle to do this, you may want to choose another debt solution that allows you to deal with all your debts together.An IVA can allow you to pay back the money you owe to your creditors over a period of time. They can usually be quite flexible too, which means that can often be adapted to suit your changing circumstances. For expert advice on what can and can’t be included in IVA debt, and how to apply for an IVA,  contact Pompom.

The Insolvency Act declares that an IVA can only be set up through a licensed Insolvency Practitioner (IP). The IP has several different roles to fulfil during the course of your IVA, firstly acting as an advisor to you and helping you to finalise the terms of the agreement. At Pompom, we can help you to find a regulated IP who can set up your IVA UK.

To prevent your creditors from taking action against you whilst your IVA is being arranged, your IP may apply to your local county court for an Interim Order. This is a Court Order that forces your creditors to cease legal action for the enforcement of any unsecured debts. It also prevents them from getting a court order against you or trying to making you bankrupt. Once the Interim Order is lodged, the effect is immediate.

The next step when setting up an IVA UK is discussing your finances and repayments with your IP. They will carefully assess your financial situation, including your spare monthly income, assets, and savings. Certain assets, such as your car, may be included in your IVA to help raise more money to pay back your debts. Your IP will help you determine a repayment plan that’s affordable for you.

Your IVA proposal is the document that shows your creditors and the court how you and your IP think that your IVA should work out. You’ll agree to repay your creditors either in part or in full over a specific period of time, usually three to five years. The document should show them that an IVA really is the best solution for tackling your debts. Your IP will help you to write your IVA proposal and prepare a report for the court.

The next stage is for your IP to call a creditors’ meeting. This is when your creditors vote on your IVA Proposal. If enough of them agree to the terms you’ve set out, your IVA will go ahead. Once the meeting is over, all creditors are legally obliged to accept the decision, whether or not they accepted it or not. The outcome will be reported to the court. You don’t need to attend the meeting, however, you will need to be contactable on the day.Although setting up an IVA UK is usually fairly straightforward, you will need to find a registered IP. Contact Pompom today to learn more about how an IVA can help you to pay off your debts in an affordable manner.

Whilst there’s nothing to stop you applying for an IVA when you’re out of work, this debt solution may not be suitable if you don’t have spare income every month to pay your creditors. Normally, this should be at least £100. If your payments are less than that amount, your creditors may not accept the IVA. If you do decide to apply for IVA, your insolvency practitioner can advise you on what payments to make. They can also suggest ways that you may be able to increase your spare income.

If your income is based only on benefits, it’s unlikely that you’ll be able to get an IVA. Since benefits are provided to fund only essentials like rent, utilities, and food, it’s usually considered unacceptable to use this money for repaying debt. So, if you’re claiming benefits like Jobseekers Allowance (JSA) or Employment and Support Allowance (ESA) and you don’t have any other income, you should think very carefully before you apply for IVA. Generally, an IVA won’t be deemed a suitable debt solution for you. However, if you receive other income on top of your benefits, getting an IVA may be possible.

You may be able to apply for IVA if you have been offered a job. However, this job offer must be in writing for it to be taken into account. Any verbal offer of employment won’t be sufficient. You will need to know the details of the role, including the start date and your expected earnings. If you have a job offer, you can usually get started with your IVA application right away.

An IVA may not be right for you if you’re unemployed. If you rely solely on benefits income, it’s unlikely that you’ll have enough spare money to pay your creditors enough each month. However, there are some circumstances in which you can still apply for IVA if you’re out of work. For example, if you have another income or you have financial support from a friend or family member. Contact Pompom now for further information.