A licensed Insolvency Practitioner negotiates a legally binding agreement between you and your creditors that allows you to pay back what you can afford over a fixed period, usually 5 years.

Normally any unsecured debts can be included within an IVA. These include but are not limited to:

• Credit Cards
• Personal Loans
• Catalogue Debts
• Store Cards
• Overdrafts
• Outstanding balances after home or vehicle repossession
• Business loans for which the client is personally responsible
• HMRC debts

The following cannot be included:

• Secured debts such as mortgages and other secured loans
• Hire Purchase
• Rent and Council Tax arrears (unless from a previous property)
• Student Loans
• Any fines or penalties arising from criminal activity
• Child maintenance arrears
• Tax credit/Benefit overpayments

No. You cannot favour one creditor over another. All your unsecured debts including loans, credit cards, store cards, overdrafts, tax bills and even some old utility bill debts will have to go into the IVA.

If you continue to have credit outside the IVA you risk the IVA failing and potentially bankruptcy. It is important that you are open and honest with the creditors as they are after all writing off a large amount of your debt.

You will only pay what you can afford each month. We will help you calculate this figure when we go through your income and expenses.

Basically you pay what is called your ‘Disposable Income’ – that is the money you have left after you have paid for all your essential and reasonable living costs.

Creditors do have limits to what they accept on spending, as of course they will get less money if you are spending more on living costs, but we will go through these expenses and help you with your monthly budget plan.

One of the main benefits of an IVA over Bankruptcy for a Homeowner is the fact that under an IVA the sale of your home cannot be forced, whereas, under the terms of a Bankruptcy homeowners may be forced to sell their property.

Under the terms of an IVA if you own a property and have equity in the property, you will be required to release some of that equity by re-mortgaging. This amount will be used to top up your IVA payments or in certain circumstances will be used as the full and final repayment of your IVA. Where equity is due to be released from a property the Insolvency Practitioner will take into account the extra revenue needed to fund the increased mortgage, so the proposed mortgage is affordable.

The time you release this money from your property will be determined by the insolvency practitioner. It could be at the early or later stages of the IVA. Penalty charges, ability to pay, the ‘loan to value’ you have currently and other factors will have to be taken into consideration.

Releasing money from your property may mean that the IVA will be for a shorter amount of time. i.e. rather than the Standard 60 months, it could be for a period of 48 months, 36 months,12 months or in some cases forming a full and final repayment of your IVA.

If you sold your property during an IVA you will be required to put all your profits from your property into the IVA. There are certain circumstances where some of the profits can be kept, but this would have to be properly justified.

If you have negative equity in your property, you can still be eligible for an IVA. However in this case there is less likelihood of you releasing equity into an IVA during the term. In this scenario, your IVA is more likely to last for 60 months and will be entirely dependent on you having sufficient disposable income to make a reasonable IVA proposal to your Creditors.

Under the terms of an IVA car owners will not have to give up ownership of their cars as long as they can show that the car is a reasonable necessity to their lives. Examples of this would be someone who needed their car to carry out their job or to get them to and from work every day. Furthermore the car must not be an extravagance; high value cars would need to be justified.

If there is a hire purchase (HP) arrangement on a car and the expense is reasonable, the HP can be included within the monthly expenditure budget. However, in the majority of cases if the HP arrangement expires prior to the completion of the IVA then the extra funds then available would have to be paid into the IVA each month. This can be useful, as it makes the IVA proposal more attractive to creditors.

If 75% or more of the debt agrees to your IVA, then your IVA will be approved and all creditors are legally bound by it. A creditor is only included in the 75% calculation if they vote, so it is important that all of them vote.

This means that if most of your debt is with one creditor then they will have the most powerful vote. This can make a difference if you have a more awkward creditor, or one who asks for a bigger minimum % to be repaid.

Usually an IVA lasts for 5 years, though this is not set in stone. Sometimes if a client struggles during the IVA or is not able to raise equity in a property as had been planned, then an extra year may be added instead.

You can do a full and final settlement IVA which can be completed in a few months. This is where you can raise a lump sum of money either from a friend or family member, a savings plan or the sale of a property. This is offered to the creditors as a full and final settlement for your debts. Vincent Bond can advise you on whether this may be an option.

IOn average it takes 6-8 weeks from the time we receive all your paperwork. This can take longer, but usually the detailed work we do at the start of the process ensures that the process is smooth.

You would not pay your creditors during this time, so the budget plan we set up for you effectively starts straight away.

Your creditors may still call you during this time, but we will help you deal with this and once the IVA is accepted the calls will stop and the creditors will take no further action.

Once you have decided that an IVA is the solution best suited to you, you must stop using all of the accounts you hold with the creditors and should not make further payments to them. This includes any bank accounts with companies which you owe money to.

Whilst the IVA is being prepared you will still receive letters and phone calls from your creditors chasing payment on the accounts held with them. If this happens then you can inform them that you are in the process of proposing an IVA. Most people at this point will be content with that answer but you must be aware that some may not be.

If someone representing a creditor demands payment and states that their company will not accept an IVA it is important to remember the following:

• Unfortunately some companies do use intimidating tactics to get payments from debtors, the Office of Fair Trading do set out clear guidelines about this and we will always challenge treatment of this kind.
• It is very unlikely that person you speak to on the phone will make decisions for the company on whether IVA proposals are accepted or not. IVA’s are accepted by many different companies every day.
• Finally remember that you are taking positive steps to deal with the whole debt, not just the one that is calling you – they are probably unaware of the other debt that you have and that by paying them you may have to borrow more money just to pay for living expenses. You are trying to break this cycle!

It is important to try to remain calm and not become embroiled in an argument. If the harassment continues you can then contact Vincent Bond who will tell you how to deal with the creditors.

Once the IVA is agreed, your creditors are no longer allowed to contact you. This means that you are free to concentrate on the other important things in your life such as your family and your job.

It is important for you to be in close contact with your Insolvency Practitioner (IP) if there are any changes, good or bad.

The IP will have an annual review with you to update your details, but it is very important for you to be open and upfront about any changes as they happen.

The IP can renegotiate with your creditors at any time and be aware that if you can afford to pay more, then they will expect you to pay more – after all they are writing off a large amount of money.

When IVA's were first set up in the late 1980’s it was partly for people who could not go bankrupt due to the type of job they had, e.g. lawyer, accountant, police officer, armed forces etc. The IVA meant creditors would not bankrupt these people so they would not lose their job.

The IVA is simply a better deal for creditors. If you were to go bankrupt the creditors would get much less money. In addition the creditors would then have an independent professional monitoring and managing your payments your insolvency practitioner.

You will probably need to open a new bank account and we can help you with this.

You will need a basic account only that has no overdraft facility. Every bank has a basic account now, so you will be able to get one.

Provided you have met the terms of the agreement and maintained your payments, your creditors will write off the remaining debt and you will be debt free.

You are then in a position to start building up you credit score and can potentially borrow money in future. However we would strongly advise that you did not do so unless you were sure you are able to make to necessary monthly payments.

• At Vincent Bond we pride ourselves on our quality of work. The first 2 payments you make (based on your affordable monthly income) are our fees for the work we do preparing your IVA case. This involves the production of a comprehensive statement of affairs, the gathering of all key documentation required and extensive analysis of the documentation to ensure that an IVA is both acceptable to creditors and sustainable for you. This can take time, but is vital to secure the best chance of the IVA being successful.
• 95% of the cases that we prepare when presented to creditors are accepted. This is because we take great care to ensure that the proposals are realistic, fair and reasonable to both you and your creditors.
• There are further fees charged for the work done by the insolvency practitioner who deals with your creditors and manages your IVA over its term, but these are taken out of the monthly payments you have agreed to pay into the IVA. As such your creditors bear the costs of the IVA, provided you make all your payments as agreed.

Yes you can. Your IVA can run separately from your business.

It is a more complicated process when you are self employed, but as long as you have kept your accounts and tax returns and are able to provide a forecast trading document for the coming year, then you can still do an IVA.

Your Vincent Bond Advisor will help explain this.

All credit activity is recorded on your credit file for 6 years and an IVA will be recorded there. As such this will affect your ability to obtain credit. Further borrowing is not permitted during and IVA so in some ways this acts as a measure to stop things from getting worse.

You can rebuild your credit score in future and once your IVA is completed you will be able to get credit again, but this may take time. Naturally we would advise caution. Often the IVA process really helps people to budget within their means so that in future they are much better equipped to manage their finances without needing credit.

Unlike a bankruptcy your name and address will not be published in the London Gazette. The IVA is a private and discreet procedure. No-one is informed about the agreement other than the creditors themselves and possibly your mortgage provider if they get involved.

The IVA can therefore be used by professionals, forces personnel and the police without damaging career prospects.

It should be pointed out that the IVA will be entered onto the government insolvency register which is a searchable public database.