What is an IVA?
Using Government legislation that is designed to help you clear debt, an IVA is a legal agreement between you and your creditors under which you pay an affordable and agreed monthly sum usually for 5 years. The total amount paid by you is divided up between all of your creditors and they accept this amount in full and final settlement of all the money that is owed to them once you have made the final monthly payment into the arrangement. Your creditors will then write off any amount which has not been paid in this way. This will regularly result in creditors writing off up to 75% of what they are owed and in many cases even more than that.
How can an IVA help me?
Once set up and if you continue to pay the agreed amount each month you’ll be protected from any further action being taken against you by your creditors.
How does the process work?
Talk to us, explain your situation, and we’ll assess whether or not an IVA could be the right solution for you. If it is, we’ll work with you to draw up an IVA Proposal – a formal offer showing your lenders what you would be able to pay. Assuming this Proposal is approved, you’ll simply start making your monthly payments (which will be based on your available income after you’ve paid all your regular expenses). As long as you fulfil your side of the agreement, any outstanding debt will be written off at the end of the IVA.
What will happen if I cannot meet my payments?
NDC will agree the payment plan that best suits your needs. This should ensure you can meet your payments for the duration of the IVA, as not meeting your agreed payments can result in bankruptcy. If your circumstances do change and you find that you are unable to meet your payments, we will try to renegotiate the terms of the agreement with your creditors.
What happens when the IVA is completed?
As long as you have fulfilled the terms of the agreement, your creditors will have no further claim against you and the balance of any remaining unpaid debts is written off.
Do all of my creditors have to agree to an IVA?
Even if they don’t vote, or they vote against your proposals, each of your creditors will be bound by the agreement as long as it has been accepted by this majority
Why would my creditors accept an IVA?
In accepting an IVA, your creditors will expect to get a better return than they would from any other reasonable alternative, and your payment proposals should demonstrate this to be the case. Your creditors will also benefit from the fact that your performance with the terms of your IVA will be monitored.
What will an IVA cost?
All the costs associated with your IVA are included in the payments you make into it. You don’t pay anything extra. At NDC, we are committed to being totally clear, open and fair to both you and your creditors about our fees and any other costs that may be incurred. We will fully inform you of the proposed fees for your particular case before you enter into the IVA. See
Key Information and Fees
Will an IVA protect my house?
One of the key benefits of taking out an IVA over bankruptcy is that the individual’s home is safe from repossession.
How much will I have to pay each month?
We will carry out a full assessment of your income and expenditure and thereafter ensure that the monthly amount that we will ask you to pay is an amount that is affordable to you and will allow you a comfortable standard of living during the course of the voluntary arrangement. The amount that you pay will be calculated by looking at your monthly income and your monthly outgoings to ascertain what surplus cash is available to be paid to your creditors. To do this we ignore any payments that you presently make to your creditors because these will also stop once the IVA begins.
Will I qualify for an IVA?
Any individual who is having difficulty paying their debts can apply for a voluntary arrangement. We will need some basic information from you so that we can ascertain if a voluntary arrangement will be the right solution for you and if it is we will prepare the papers to put the arrangement forward to your creditors.
Will my creditors really write off debt?
In voluntary arrangements creditors are offered more than they would receive if you were made bankrupt. Additionally the creditors know under the voluntary arrangement what they are going to receive and when they are going to receive it. They do not have to spend time and money chasing you for payment or employing debt collection agencies or issuing court proceedings and can thus save time, cost and expense. Creditors usually take a sensible and practical approach to the situation.
Will I be able to keep my car?
You will always be able to retain your vehicle because more often than not you will need a vehicle to get to and from work to allow you to earn the money that you need to live on. Creditors recognise that if you cannot get to work then you will have no surplus income to make payments into the voluntary arrangement and are therefore happy for you to keep your car.
Can I have an IVA if I have a CCJ?
Yes. Indeed it will help as it will prevent your creditors from pursuing enforcement proceedings against you.
Do I need to be working full time?
Not necessarily. However you will need to demonstrate to your creditors that you have sufficient surplus income to pay into the arrangement.
Does my partner need to know about my IVA?
Yes if you are married or co-habiting. It is likely that creditors will require full information on household income and expenditure.
Will all my debts be covered by my IVA?
An IVA only covers unsecured debts including unsecured loans, store cards, credit cards, catalogue debts and arrears regarding utilities.
Will my credit rating be affected by my IVA?
If you are already in arrears with your repayments to your creditors then you will already have a poor credit rating. If you successfully complete an IVA it will go some way towards restoring your credit rating.
What happens if I don’t keep up the payments on my IVA?
If you default on your payments, the supervisor of an IVA can initiate bankruptcy proceedings against you.
I am self-employed. Can I do an IVA and continue trading?
Yes you can, however IVAs for individuals in this position are generally more complicated and often require more work on the part of the IP. Once we have all of your information we will be able to discuss this issue with you and look at how this may alter the way that the IVA proposals are put together.
What if my creditors do not accept my IVA proposals?
In the event that your creditors do not accept the proposals then the IVA will not be implemented and the creditors remain free to take any action they wish (and are entitled to do so) against you. This may result in bankruptcy proceedings being started.
Can I finish my IVA early?
Yes. If you wish to pay a lump sum into your IVA, then we can arrange a variation meeting with your creditors to offer it and confirm any final settlement. Under normal circumstances this will not happen, but it may be that you inherit a large sum or win the lottery. This is usually called a windfall. There will be a windfall clause in your IVA contract that will require you to pay the money into your IVA. As your creditors have agreed to freeze interest and charges and write off a large proportion of your debt, it is only fair that you should come to a new arrangement with your creditors.
Can I cancel my IVA?
No, as an IVA is a legal process it means that once it has been set up it cannot be cancelled.