What is an IVA?
An Individual Voluntary Arrangement or IVA as it's commonly referred to, is a legally binding contractual agreement between an individual and the people and organisations they owe money to known as creditors.
An IVA is a formal alternative to bankruptcy. It is often an option for people who feel there is no chance of their debts being paid off in full.
An IVA is a formal alternative to bankruptcy. It is often an option for people who feel there is no chance of their debts being paid off in full.
Is an IVA right for me?
Unlike other debt management companies who typically offer an IVA for £15,000 or £20,000 minimum- ClearDebt can provide an IVA for unsecured debts of £10,000. In some cases this may even be less.
Our IVA fees ( which are taken out of the monthly contribution agreed by your creditors) are often lower than our competitors.
IVA Criteria
There are certain key criteria you need to meet to be able to propose an Individual Voluntary Arrangement:
It is important however that an IVA proposal is fair to both you and the creditors. This usually means that you must be able to make a monthly minimum contribution of £160 over a maximum period of 5 years. There are negatives to an IVA which should be considered, these can be found on our IVA Frequently Asked Questions page.
IVA Pros and Cons
If you are considering bankruptcy, there are many ways an IVA is the best solution, read more on the IVA or bankruptcy? page.
Below are the main pros and cons of an IVA.
Advantages of an IVA
Disadvantages of an IVA
Do you qualify for an IVA? Take our Debt analyser.
IVA FAQs
In this section are just a few of the most frequently asked IVA questions. To view all of the questions and their answers go to IVA FAQs
Q: How long will the IVA last?
A:Usually an IVA will last for 5 years (60 months), however it can be for any length of time and your credit rating will be affected for 6 years.
Q: Can creditors change their minds if the IVA has been agreed?
A: No. Once the IVA arrangement has been agreed your creditors are bound by the terms and, as long as you maintain your obligations (i.e keep up the payments and tell your supervisor if your circumstances change) they cannot take further action against you or demand a higher repayment from you.
If you have a question about an IVA that has not be answered here, then please visit the ClearDebt Community to post the question and we will answer it.
To decide if a ClearDebt IVA is the best option for yourself, why not Compare your IVA company against others
IVA and Insolvency practitioners
An IVA or Individual Voluntary Arrangement is legally binding arrangement between you and all of your creditors. To see if you meet the criteria for an IVA, read more at Is an IVA right for me?
A ClearDebt IVA will help those in financial difficulties to make affordable monthly repayments to settle their unsecured debt within a reasonable timeframe.
All interest rates are frozen and the IVA will prevent any creditor from contacting and harassing you.
An IVA can be obtained with the help of a licensed insolvency practitioner. Your IVA insolvency practitioner will review your financial situation and decide what amount you can afford to maintain on your monthly repayments. These monthly repayments will need to be maintained over the duration of the IVA- usually 5 years. If 75% (measured by the amount of debt you owe to each creditor) of your creditors agrees, then all of your debts and interests will be frozen from the date that your IVA is agreed.
If all of the agreed payments are made, in 5 years time or possibly later you could be debt free.
Your creditors will usually forgo a proportion of your debt and at the end of the agreed IVA period the remainder of these debts are written off. This is providing you have maintained the agreed monthly payments.
Typically a ClearDebt IVA can see as much as 70% of your debt written off.
What does an insolvency practitioner do?
An Insolvency practitioner (IPs) is a licensed professional who are backed by law to use insolvency procedures; they help people and companies who are in financial difficulties. Most IPs are qualified accountants or solicitors and all insolvency practitioners are regulated by professional bodies. These professional bodies have a code of conduct and high standards of ethics to which all insolvency practitioners must adhere to.
Our insolvency practitioner, once you have decided to consider a ClearDebt IVA, will assess whether an IVA is a viable option if you. It is the IPs professional responsibility to give the best financial advice possible, so if this is not the case you will be informed so and advised on the next best course of action.
If an IVA is the best option then the insolvency practitioner has a responsibility to both you and the creditors that you owe.
In every IVA, the IP will make sure that the information you give is accurate and true and that you can realistically afford the monthly repayments.
You will need to give them a full and true statement of your current financial situation. If you fail to do this then the insolvency practitioner may refuse to continue to act on your behalf; bear in mind that if the IP discovers that false information has been given once the IVA has been agreed, then the IVA may fail.
After the creditors have agreed to an IVA, the insolvency practitioner has a responsibility to ensure that the terms are met. If the monthly payments are not made or if you do not comply with the reasonable requests of the IP, then the creditors will be informed.
Our insolvency practitioners have many years of experience dealing with all aspects of debt and almost no issue is new to them. To view more about the people who work at ClearDebt and who will be helping you become debt free, look at our Staff profile page.
Waiver of contribution
IVA Protect is a innovative, exclusive service from ClearDebt that offers payment protection for everyone with a ClearDebt IVA.
The waver contribution is designed to protect the monthly contributions of your IVA from unfortunate circumstances such as unemployment and serious illness.It should give individuals with this protection more confidence in their IVA and as such should alleviate unwanted stress. Read more about ClearDebt's Waiver of contribution.
The cost of an IVA: ClearDebt's IVA fees and costs
ClearDebt launched in 2004, determined to the most ethical and transparent IVA provider in the market. This is still our prime goal today: we believe that IVA costs should be made readily available to you.
What does an IVA cost?
Your advisor will explain in detail the fees of your IVA proposal. However, at any time, if you feel that you do not fully understand the fee structure we have in place, or have any further queries regarding your fees, please contact us and we will be happy to go through them with you. There are no additional or hidden IVA costs. All of the fees that ClearDebt charge for initiating and supervising your IVA are included in the agreed amount you pay each month into your agreement.
There are two sets of fees which are charged for an IVA:
No other fees are charged.
The cost of an IVA: Nominee's fee
This is the fee which covers the time and expertise needed to compile your full financial picture to put together your IVA proposal. Your Nominee represents you from the start of the process, and if your proposal is accepted, your Nominee becomes your Supervisor.
The Nominee's fee can vary from £550 to £2,500 depending on varying factors such as the level of debt you owe. This figure will be taken from the first few (typically three to five) payments that you make.
If you are a sole trader, partner in a business or may have extenuating circumstances, these fees may sometimes be higher than previously stated. If this is the case, this will be fully explained to you.
The cost of an IVA: Supervisor's Fee
Once the IVA has been approved, a monthly supervisor's fee will be charged. This covers the expert work carried out over the course of your IVA (normally 5 years) to ensure that it is managed correctly.
In addition to this, you will be given a day- to- day account manager who will act as your main point of contact for the duration of your IVA, should circumstances change. They will also conduct an annual review of your IVA to ensure payments are still affordable and there are no changes. The Supervisor fees are never more than a maximum of 15% of all of the contributions made over your IVA. They will be taken monthly.
The cost of ClearDebt's advice
There are no charges for debt advice prior to the IVA being prepared and there is no charge for our service until your completed, agreed proposal is returned to us.
If, you decide after your IVA has been circularised to your creditors, that a ClearDebt IVA is not for you, then we reserve the right to charge you up to £200 to recover the costs.
In the unlikely event that your proposal is refused by your creditors, you will not be charged anything and we will suggest an alternative option for you.
Full and final IVA settlement
This is sometimes called a "one off IVA". This is where a one-off partial payment is proposed and accepted by your creditors in exchange of the full and final settlement of all debts; the remainder of the debt is written off. The IVA is used as a device to bind the creditors to the agreement.
There are many ways to raise the money for a full and final settlement such as :
To read more on this topic, visit the Full and final IVA settlement section .
IVA case studies
ClearDebt is constantly helping people free themselves from situations they thought they were trapped in. This section documents just some of the stories of people we have drastically improved their financial situation.
The first case study is a ClearDebt client who reduced their debt by 61% -saving £600 a month with an IVA.
You can view the most recent and other comments and feedback left by satisfied clients on the ClearDebt testimonials page.
If you would be willing to share your feedback and experience anonymously with others then you can do so- contact us .
Our IVA fees ( which are taken out of the monthly contribution agreed by your creditors) are often lower than our competitors.
IVA Criteria
There are certain key criteria you need to meet to be able to propose an Individual Voluntary Arrangement:
- You should be insolvent. This would mean that as your debts fall due for payment you are unable to pay, or you have inadequate assets to repay your debts and liabilities.
- To propose an IVA with an interim order (sometimes helpful for self-employed people but not usually necessary for a consumer IVA) it must have been proposed within the past 12 months.
- A licensed insolvency practitioner must be willing to act as your nominee. Here at ClearDebt we have our own licensed insolvency practitioners, so you know that we will be dealing with every aspect of your IVA.
It is important however that an IVA proposal is fair to both you and the creditors. This usually means that you must be able to make a monthly minimum contribution of £160 over a maximum period of 5 years. There are negatives to an IVA which should be considered, these can be found on our IVA Frequently Asked Questions page.
IVA Pros and Cons
If you are considering bankruptcy, there are many ways an IVA is the best solution, read more on the IVA or bankruptcy? page.
Below are the main pros and cons of an IVA.
Advantages of an IVA
- Prevention of property repossession and bankruptcy proceedings.
- Stop to creditor harassment for the entire length of the IVA.
- Frozen interest on your debts.
- One affordable monthly repayment.
- You could see yourself debt free in 5 years.
Disadvantages of an IVA
- Damage to your credit rating for the length of the IVA and up to a year after completion.
- Failure of an IVA can result in creditors petitioning for your bankruptcy.
- Possible release of home equity (usually in the final year of the IVA)
- Any extra money that you come into during the course of the IVA will be taken into account, you could be expected to pay any windfall into your IVA (but never more than you owe.)
Do you qualify for an IVA? Take our Debt analyser.
IVA FAQs
In this section are just a few of the most frequently asked IVA questions. To view all of the questions and their answers go to IVA FAQs
Q: How long will the IVA last?
A:Usually an IVA will last for 5 years (60 months), however it can be for any length of time and your credit rating will be affected for 6 years.
Q: Can creditors change their minds if the IVA has been agreed?
A: No. Once the IVA arrangement has been agreed your creditors are bound by the terms and, as long as you maintain your obligations (i.e keep up the payments and tell your supervisor if your circumstances change) they cannot take further action against you or demand a higher repayment from you.
If you have a question about an IVA that has not be answered here, then please visit the ClearDebt Community to post the question and we will answer it.
To decide if a ClearDebt IVA is the best option for yourself, why not Compare your IVA company against others
IVA and Insolvency practitioners
An IVA or Individual Voluntary Arrangement is legally binding arrangement between you and all of your creditors. To see if you meet the criteria for an IVA, read more at Is an IVA right for me?
A ClearDebt IVA will help those in financial difficulties to make affordable monthly repayments to settle their unsecured debt within a reasonable timeframe.
All interest rates are frozen and the IVA will prevent any creditor from contacting and harassing you.
An IVA can be obtained with the help of a licensed insolvency practitioner. Your IVA insolvency practitioner will review your financial situation and decide what amount you can afford to maintain on your monthly repayments. These monthly repayments will need to be maintained over the duration of the IVA- usually 5 years. If 75% (measured by the amount of debt you owe to each creditor) of your creditors agrees, then all of your debts and interests will be frozen from the date that your IVA is agreed.
If all of the agreed payments are made, in 5 years time or possibly later you could be debt free.
Your creditors will usually forgo a proportion of your debt and at the end of the agreed IVA period the remainder of these debts are written off. This is providing you have maintained the agreed monthly payments.
Typically a ClearDebt IVA can see as much as 70% of your debt written off.
What does an insolvency practitioner do?
An Insolvency practitioner (IPs) is a licensed professional who are backed by law to use insolvency procedures; they help people and companies who are in financial difficulties. Most IPs are qualified accountants or solicitors and all insolvency practitioners are regulated by professional bodies. These professional bodies have a code of conduct and high standards of ethics to which all insolvency practitioners must adhere to.
Our insolvency practitioner, once you have decided to consider a ClearDebt IVA, will assess whether an IVA is a viable option if you. It is the IPs professional responsibility to give the best financial advice possible, so if this is not the case you will be informed so and advised on the next best course of action.
If an IVA is the best option then the insolvency practitioner has a responsibility to both you and the creditors that you owe.
In every IVA, the IP will make sure that the information you give is accurate and true and that you can realistically afford the monthly repayments.
You will need to give them a full and true statement of your current financial situation. If you fail to do this then the insolvency practitioner may refuse to continue to act on your behalf; bear in mind that if the IP discovers that false information has been given once the IVA has been agreed, then the IVA may fail.
After the creditors have agreed to an IVA, the insolvency practitioner has a responsibility to ensure that the terms are met. If the monthly payments are not made or if you do not comply with the reasonable requests of the IP, then the creditors will be informed.
Our insolvency practitioners have many years of experience dealing with all aspects of debt and almost no issue is new to them. To view more about the people who work at ClearDebt and who will be helping you become debt free, look at our Staff profile page.
Waiver of contribution
IVA Protect is a innovative, exclusive service from ClearDebt that offers payment protection for everyone with a ClearDebt IVA.
The waver contribution is designed to protect the monthly contributions of your IVA from unfortunate circumstances such as unemployment and serious illness.It should give individuals with this protection more confidence in their IVA and as such should alleviate unwanted stress. Read more about ClearDebt's Waiver of contribution.
The cost of an IVA: ClearDebt's IVA fees and costs
ClearDebt launched in 2004, determined to the most ethical and transparent IVA provider in the market. This is still our prime goal today: we believe that IVA costs should be made readily available to you.
What does an IVA cost?
Your advisor will explain in detail the fees of your IVA proposal. However, at any time, if you feel that you do not fully understand the fee structure we have in place, or have any further queries regarding your fees, please contact us and we will be happy to go through them with you. There are no additional or hidden IVA costs. All of the fees that ClearDebt charge for initiating and supervising your IVA are included in the agreed amount you pay each month into your agreement.
There are two sets of fees which are charged for an IVA:
- The Nominee's fee
- Supervisor's fee
No other fees are charged.
The cost of an IVA: Nominee's fee
This is the fee which covers the time and expertise needed to compile your full financial picture to put together your IVA proposal. Your Nominee represents you from the start of the process, and if your proposal is accepted, your Nominee becomes your Supervisor.
The Nominee's fee can vary from £550 to £2,500 depending on varying factors such as the level of debt you owe. This figure will be taken from the first few (typically three to five) payments that you make.
If you are a sole trader, partner in a business or may have extenuating circumstances, these fees may sometimes be higher than previously stated. If this is the case, this will be fully explained to you.
The cost of an IVA: Supervisor's Fee
Once the IVA has been approved, a monthly supervisor's fee will be charged. This covers the expert work carried out over the course of your IVA (normally 5 years) to ensure that it is managed correctly.
In addition to this, you will be given a day- to- day account manager who will act as your main point of contact for the duration of your IVA, should circumstances change. They will also conduct an annual review of your IVA to ensure payments are still affordable and there are no changes. The Supervisor fees are never more than a maximum of 15% of all of the contributions made over your IVA. They will be taken monthly.
The cost of ClearDebt's advice
There are no charges for debt advice prior to the IVA being prepared and there is no charge for our service until your completed, agreed proposal is returned to us.
If, you decide after your IVA has been circularised to your creditors, that a ClearDebt IVA is not for you, then we reserve the right to charge you up to £200 to recover the costs.
In the unlikely event that your proposal is refused by your creditors, you will not be charged anything and we will suggest an alternative option for you.
Full and final IVA settlement
This is sometimes called a "one off IVA". This is where a one-off partial payment is proposed and accepted by your creditors in exchange of the full and final settlement of all debts; the remainder of the debt is written off. The IVA is used as a device to bind the creditors to the agreement.
There are many ways to raise the money for a full and final settlement such as :
- Sale of assets
- A remortgage
To read more on this topic, visit the Full and final IVA settlement section .
IVA case studies
ClearDebt is constantly helping people free themselves from situations they thought they were trapped in. This section documents just some of the stories of people we have drastically improved their financial situation.
The first case study is a ClearDebt client who reduced their debt by 61% -saving £600 a month with an IVA.
You can view the most recent and other comments and feedback left by satisfied clients on the ClearDebt testimonials page.
If you would be willing to share your feedback and experience anonymously with others then you can do so- contact us .
IVA on Twitter
ClearDebt IVA News & blog posts
We publish lots more information on our full website.For full terms & conditions and regularly updated information, please visit www.cleardebt.co.uk.© ClearDebt Limited 2011 - All rights reserved