Tailored Debt Solutions

Individual Voluntary Arrangements (IVA)

What is an Individual Voluntary Arrangement (IVA)?

An Individual Voluntary Arrangement is a debt solution that allows you to "freeze" your debt and agree to pay it back over a specified period, usually 5-6 years. Any money you owe thereafter is written off.

An IVA is a legally binding agreement between you and your unsecured creditors, arranged and supervised by a licensed Insolvency Practitioner (IP). In short, you agree to pay back the maximum you can afford over a specified period of time, at the end of which period your creditors agree to write off any remaining balances.

We will work with you to calculate what you can comfortably afford to pay each month.

We do not charge you for advice about an IVA or for help with the preparation of the documents. If you are in a debt management plan already it will continue as normal until your IVA has been approved.

The fees for an IVA are agreed upon with your creditors and are taken out of the money paid into the arrangement by you once the arrangement has been approved, so you do not pay anything extra to cover the fees.

Creditors included in an IVA:

  • Personal Loans
  • Credit Cards- Store Card
  • Catalogues- Overdrafts
  • Payday Loans
  • Council Tax Arrears
  • Utility Arrears
  • Benefit Overpayments

Benefits

  • Pay monthly amounts based on what you can afford.
  • Your remaining debts get written off after making your final payment.
  • Interest, charges, and debt collection stop meaning the amount you owe stops increasing.
  • Your insolvency practitioner deals with creditors on your behalf and creditors including in the IVA cannot take legal action against you.

Risks Of IVA

  • Your creditors could request that you reduce your living costs.
  • You could have to sell any valuable assets.
  • If you own any property, you may have to remortgage to pay the lump sum into the IVA.

PROTECTED TRUST DEED (PTD) - SCOTLAND ONLY

If you owe more than £5000, a PTD can offer a fresh start. This is a formal agreement between you and your creditors. You pay what you can towards your debts, and once complete the rest of your debt is written off.

Benefits

  • You pay single monthly payments based on what you can afford.
  • Interest and any other charges are stopped once your PTD is accepted.
  • PTD includes most non-priority or unsecured debts such as student loans and fines.
  • Once your final payment is made, the rest of your debts get written off.

Risks Of PTD

  • PTD is kept on the public register of insolvencies for at least 5 years.
  • This stays on your credit file for 6 years.
  • It could be harder to get credit.
  • You may be asked to sell any assets over £1000.
  • If property is owned, you might need to pay equity towards your debts.
  • Items that are on-hire purchase agreements can be affected meaning you may need to return them.

Debt Management Plan?

The new amount you will pay to your lender is concluded from a thorough review of your monthly income and expenditure. This guarantees that it will be affordable for you and allow you to live comfortably whilst paying what you owe.

On average, a Debt Management Plan takes 30 days to be implemented for your repayments. This may be extended due to potential complications with your lenders.

Ultimately, the plan allows you to fully repay your debt whilst you can still afford the essentials. Allowing you to live with some of that pressure lifted off you.

If your situation changes and you no longer need a reduced payment, the DMP is not a secured contract - you can return to your original payments at any time.

Bankruptcy

If repaying your debt has become an unrealistic way forward, Bankruptcy can be a way of resolving the situation. Bankruptcy takes the form of a court order and is accessed via an application known as a petition.

The process can be undertaken by an individual debtor or by a creditor who is owed more than five thousand pounds. An Official Receiver completes an assessment of your current circumstances; the order is fulfilled by a combination of asset realisation and regular contribution, the latter in the form of an Income payments order where the debtor demonstrates a disposable income is available.

The debtor is discharged as a bankrupt after one year with an income payments order, where appropriate, lasting a total of three years. Bankruptcy details are held on the Insolvency Register for fifteen months after your discharge* and your Credit report for a period of 6 years.

*Unless there is a Bankruptcy restriction undertaking in place.

DEBT RELIEF ORDER (DRO)

Debt Relief Order (DRO)
This is a way of cancelling your current debts if they do not improve within 12 months. During this, any interest and charges will stop being added to your debts and you will not pay back what you owe and you won't need to deal with the people that you owe money to. You must meet the minimum eligibility criteria for a DRO, find out more here:
https://www.gov.uk/guidance/how-to-get-a-debt-relief-order-dro

Benefits

  • Any collections activity to those who you owe money to will stop.
  • Your debts will be cancelled after 12 months.
  • Interest charges will be cancelled, but can be added back on if your DRO fails.
  • Your intermediary will deal with your application for you, meaning you don't have to go to court.
  • You can keep your household goods.

Risks Of DRO

  • This is kept on a public register for 15 months.
  • If you're looking to get credit in the future, this could make it harder as it stays on your credit file for 6 years.
  • If your financials get better during the moratorium period, this could result in your DRO getting cancelled. This lasts for 12 months and the people you owe money to could ask you to pay back the charges you owe including interest.
  • If you break the rules of your DRO, it could be cancelled.