Individual Voluntary Arrangements (IVAs)

If you have substantial amount of unsecured debt, usually around £15000 or more, an IVA could be the best solution.

It acts as a legally binding agreement between you and your creditors effectively freezing interest charges and setting an affordable monthly payment amount over an agreed fixed period, usually 5 years.

The Benefits of an IVA are:

·         Write off the unsecured debt you can’t afford to repay
·         One affordable monthly payment – usually for 5 years
·         Protects you from further action by your creditors
·         Creditors are legally bound by the terms of the agreement
·         Real alternative to declaring yourself bankrupt
·         No public notices: an IVA is between you and your creditors

Best of all, you will know exactly where you stand, exactly what you have to pay each month – and for how long.

Capricorn Debt Management Solutions are here to help whatever your circumstances: divorce, illness, losing a job or business, starting a family or simply over committing.

Subject to eligibility and acceptance, debt write off applies on completion of an IVA, alternative solutions may be offered, fees payable. Your ability to obtain credit will be affected, homeowners may be required to remortgage during the term. For more information on IVAs call us for a free consultation on 0121 370 2293 or 01785 258305.

Frequently Asked Questions

• Individual Voluntary Arrangements?
• How much of my debt will be written off?
• Is an IVA one size that fits all?
• What if I own my own home?
• What if I have a CCJs against me?
• Do creditors have to accept an IVA?
• What happens at the creditors meeting?
• If I enter an IVA, what happens next?
• How long does it take to set up an IVA?
• What if a creditor takes further recovery action before the IVA has been approved?
• What if the IVA is not approved?

Individual Voluntary Arrangements
Is an IVA the right solution for me? To enter an IVA you should have at least unsecured debts of £15000 and more than 4 creditors. A mortgage, second charge loan or car hire purchase agreement are secured debts so you can not use an IVA to pay off secured debts or tangible objects that can be repossessed. But there are ways that you could remortgage a house or refinance a car.

How much of my debt will be written off

Nowadays, it is becoming more difficult to get lenders to agree to write off more that 55/66% of debts with an IVA, no matter what other debt management companies say in their advertising literature. It may be possible to write off up to 75% but this is becoming rare.

Is an IVA one size that fits all

No. An IVA can be set up on a basis of offering a lump sum payment to creditors as apposed to making monthly payments. Some IVAs can be a mixture of two, depending on circumstances, a lump sum and monthly payments.

What if I own my own home

You are likely to be required to release the equity in your home, if there is any there, usually in the last year of the IVA.

What if I have a CCJs against me

Entering an IVA will avoid further recovery action after a creditor has obtained a CCJ against you. CCJs can be incorporated into the IVA.

Do creditors have to accept an IVA

Once you have decided that an IVA is the right option for you, a draft proposal will be drawn up by our specialist insolvency practitioner for your creditors. He will invite them all to a creditors meeting arranged by him. At this meeting, he will negotiate on your behalf with the creditors.

What happens at the creditors meeting

Once the negotiations are over, the insolvency practitioner will put it to a vote. If 75% of your creditors by value of those who vote, agree to the IVA, then the rest are bound by the IVA, even if they voted against it. Sometimes creditors will argue about the terms of the IVA. Some may ask that you make payments over a longer period or ask that your assets are used to raise cash to pay for the IVA – this may mean selling or remortgaging your home, or selling your car, or any other asset you may have that can be sold to raise cash.

If I enter an IVA, what happens next

Once the IVA is agreed, the insolvency practitioner will supervise the IVA and make sure you make the payments. We will also take an interest in your case and you can call us any time for advice.  An IVA can help you avoid bankruptcy, as long as you stick to the payments that have been agreed. It is important that we know the true extent of your debts. Being completely honest with your advisors is the only way they can do the best for you.

How long does it take to set up an IVA

It will take about 6 to 8 weeks to set an IVA up for you.

What if a creditor takes further recovery action before the IVA has been approved

You can apply to the courts for an interim order to stop any of your creditors taking further action until the outcome of your creditors meeting has become known.

What if the IVA is not approved

Capricorn Debt Management Solutions will discuss an alternative arrangement with you, which may be a debt management plan or bankruptcy. It is usually possible to reapply for an IVA a year later, so by paying into a debt management plan for a year may improve your chances of success the second time.

Debt Management Plan or IVA- which is better for me?
What is the difference between an IVA (Individual Voluntary Arrangement) and a debt management plan from a debt management company such as Capricorn Debt Management Solutions?*

If you are in debt, of course, the real question is  ‘Which would be better for me?’ Take a look at the most important similarities and differences.

In some ways, the benefits they offer are quite similar. Both are debt solutions:
·         Involve asking a specialist to negotiate with creditors on your behalf
·         Deal with unsecured debts (e.g. credit cards and overdrafts. It does not include mortgages or secured loans).
·         Help people who cannot afford to maintain their debt repayments
·         Involve replacing multiple payments with just one- to the financial organisation, which distributes funds among the creditors.

Debt Management Plan & IVA- main difference

An IVA is only for larger debts-in most cases £15,000 or more
·         A debt management plan can help people deal with small or large debts
·         Capricorn Debt Management Solutions is set up to help people who owe £2,500 or more
·         An IVA is a legal binding agreement, which must be set up by an Insolvency Practitioner (IP). Once it’s accepted, creditors and individuals alike are bound by the arrangement.
·          A debt Management plan is an informal arrangement. Creditors and individuals are free to change their minds at any point.
·         An IVA- if accepted- is guaranteed to result in lower monthly payments and freeze interest on the debt.
·         In a debt management plan, creditors are asked to accept lower monthly payments and freeze interest. They are not obliged to do this, but there is a good chance they will see it as the best way to help you to repay the money.
·         And IVA is (in most cases) a five-year commitment, with fixed monthly payments. No one can tell the future, but creditors won’t approve an IVA (and the debt specialists IP won’t ask them to) if they don’t think the individual will be able to maintain regular payments.
·         A debt management plan is not ‘set in stone’. We can tell you how long it will take to pay off your debts and how much you have to pay every month, but this can change if your disposable income goes up or down or if creditors change their minds about freezing interest and/or accepting reducing payments.