Frequently Asked Questions

• What is an Individual Voluntary Arrangement (IVA)?
• Why does an IVA require an Insolvency Practitioner (IP)?
• How do I set up an IVA?
• Do all my creditors have to agree to an IVA?
• Do I have to attend the creditors' meeting?
• What makes an IVA a good solution to my debts?
• Why would my creditors accept an IVA?
• How much will it cost me?
• What if I can't make my payments?
• What will happen at the end of the IVA?
• I'm a homeowner – what will happen to my home?

• What is an Individual Voluntary Arrangement (IVA)?

  
  A. An Individual Voluntary Arrangement (IVA) is a way of clearing your unsecured debts without entering into bankruptcy. Backed by government legislation, it's a legally binding agreement between you and your unsecured creditors. Rather than paying your creditors directly, you agree to spend a set time period (usually five years) paying an agreed amount into the IVA every month. Your creditors agree not to take any legal action against you and to write off any debt that's left at the end of the IVA. An IVA can only be set up by a licensed Insolvency Practitioner (IP).

• Why does an IVA require an Insolvency Practitioner (IP)?

  
  A. A licensed Insolvency Practitioner is a person (often an accountant or solicitor) who has the experience and qualifications to act in formal insolvency cases. Your IP is responsible for presenting your IVA to your creditors and ensuring that it takes into account their interests as well as yours.

• How do I set up an IVA?

  
  When you contact Think Money, we'll go over your financial situation with you and recommend the debt solution which is best suited to your individual needs. If that turns out to be an IVA, we'll ask you to supply us with specific details so we can draw up an IVA proposal which we think your creditors will accept, based on how much as you can afford every month once you’ve allowed for your living expenses and secured debts. Next, we send the proposal to your unsecured creditors, so they can see how much money they would recover through an IVA. At the Creditors' Meeting, they can accept it, reject it or request changes to it. If it is accepted, the IVA can officially start – your creditors are then legally bound by it, so as long as you uphold your side of the agreement, they cannot change their minds or go back on any part of the agreement. And when the IVA ends, you WILL be debt free.

• Do all my creditors have to agree to an IVA?

  
  A. No. When the Creditors' Meeting takes place, your IVA proposal must be accepted by voters who collectively 'own' 75% of your debt. If this happens, even the creditors who vote against it or do not vote at all will be bound by it.

• Do I have to attend the creditors' meeting?

  
  A. No. However, you should make sure you're reachable by phone, so you can consider any requested changes to the proposal immediately.

• What makes an IVA a good solution to my debts?

  
  A. An IVA is not the right solution for everyone with debts – but for people who have substantial debt and are having problems making their monthly payments, it can be an excellent solution. For most people in this situation, the most appealing benefits of an IVA would be: 1. No more pressure / worry about legal action from creditors 2. A write-off of the debt they can't afford to repay 3. Significantly lower monthly repayments 4. A clear date by which they KNOW they will be debt free. Plus, it avoids many of the disadvantages associated with bankruptcy. Homeowners, for example, will probably have to release some of the equity in their home, but not sell it. There's also no court process involved, and an IVA won't appear in the papers or disqualify them from certain jobs in the way bankruptcy does.

• Why would my creditors accept an IVA?

  
  A. Even if it means they'll write off some of your debt, an IVA will also mean they can count on receiving the remainder – which should be more than they would receive if they pursued an alternative such as bankruptcy. They also know that the Insolvency Practitioner (IP) will examine your finances closely and ensure that the IVA is fair to them as well as to you. And finally, an IVA avoids the need for expensive, time-consuming legal action.

• How much will it cost me?

  
  A. It's different in each case, as it depends on how much you have available on a monthly basis once you've allowed for your secured debts and living expenses. All fees and costs will be deducted from the payments you make. And before anyone commits themselves to the IVA, everyone involved (you and all your creditors) will know exactly how much they'll pay or receive during the IVA. We do not pay or receive any undisclosed fees or commission – we are committed to being totally clear about all fees and charges, and to providing a service which is fair to both you and your creditors.

• What if I can't make my payments?

  
  A. As part of the service we provide, we will review your monthly payments on a regular basis to check that they are still affordable. If you are no longer able to meet your payments, we will try to renegotiate lower payments with your creditors, although they are not obliged to accept this.

• What will happen at the end of the IVA?

  
  A. Whatever payments you make during the IVA are considered to be in full and final settlement of your debts. In other words, once your IVA has come to a successful conclusion, your unsecured debts WILL be cleared and all creditors involved in the agreement will have no further claim against you.

• I'm a homeowner – what will happen to my home?

  
  A. You may be required to release some of the equity in your home, to increase the amount you can pay your creditors. But you are extremely unlikely to lose your home. In fact, an IVA does not affect secured debts at all. Once you start making payments to the IVA, you will stop paying your unsecured creditors, but must continue paying for your mortgage and any secured debts you may have.