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Key information, terms, and conditions for IVAs under the Consumer IVA Protocol.

You can only arrange an IVA through a licensed Insolvency Practitioner. Make sure you read this factsheet with your proposal, along with the full terms and conditions.

Access free to get more information about an IVA, before entering into any agreement.

Individual Voluntary Arrangements

An IVA is a legal agreement between you and your creditors (the people or organisations you owe money to), to help pay off all or part of your debts. You鈥檒l make regular payments over 5 or 6 years to an Insolvency Practitioner, who will divide the money between your creditors.

When an IVA may not be suitable

An IVA may not be the best solution if you have very low levels of debt, you can only afford a small payment each month, or your income is mainly made up of benefits.

Your monthly payment amount

An Insolvency Practitioner will help you work through your monthly income and outgoings. They鈥檒l work out how much you can comfortably afford to pay each month. If you get any disability or caring related benefits, make sure you include all the costs related to the disability or caring needs. Your Insolvency Practitioner will review your income and outgoings every year. If your financial situation has changed you may have to increase or decrease your monthly payments. You must co-operate with the review or your IVA may be cancelled.

IVA fees

Insolvency Practitioners charge a fee for their work, which is included in your monthly payments 鈥� not upfront. An Insolvency Practitioner must explain what fees will be charged before you agree to the IVA. Typically, your first monthly payments will cover more of the fee than the debts you owe.

What happens to your debts

The creditors included in your IVA will stop asking you for payment once your IVA starts, although they may still write to you from time to time to confirm account balances or statements. Once you鈥檝e made all the agreed payments, you鈥檒l receive a 鈥榗ertificate of completion鈥� and you will no longer owe any of the debts included in your IVA.

If you have joint debts with someone else, the creditors can still pursue the other person for payment of the debt. It may be helpful for them to get too.

Your credit score

Your IVA will appear on your credit file for the 6 years from the date your IVA starts. This may make it difficult for you to get credit in the future.

If you own your home

You will not need to sell or use any equity in your home to pay for your IVA. However, if your home equity is 拢10,000 or more, your payments will last for 6 years instead of 5 to compensate your creditors.

Any change in your financial circumstances

If you receive a pay increase or inherit some money, you must tell your Insolvency Practitioner so they can complete a review. You may have to increase your monthly payments or pay some of the money into the IVA. You must also tell them if you are at risk of redundancy. You can usually keep up to a total of 6 months redundancy pay, any more than this should be paid into your IVA.

If you cannot afford to pay

If you can no longer afford your IVA, speak to your Insolvency Practitioner as soon as possible to discuss your options, such as reducing payments, a payment holiday, or cancelling. Your creditors may need to agree to any changes. If you take a payment holiday, your IVA will be extended to make up the missed payments.

If you stop making payment

You must keep up with your monthly payments or your IVA may be cancelled. Speak to your Insolvency Practitioner as soon as possible to discuss your options. Your IVA can be extended to make up any missed payments.

If you want to cancel your IVA

Speak to your Insolvency Practitioner if you do not want to continue with your IVA. You will not receive a refund of any money you鈥檝e already paid.

If your IVA is cancelled

If your IVA is cancelled, creditors can start to chase you for repayment again. They may claim interest and charges that were frozen during the IVA period. If the IVA is cancelled early, you might find you鈥檝e repaid less debt off than expected. As more money goes towards your IVA fees initially, creditors receive a smaller share of your payments.

Cooperation with your Insolvency Practitioner

Your IVA may get cancelled if you fail to cooperate with any reasonable requests for information from your Insolvency Practitioner.

The Individual Insolvency Register

Your IVA will be added to the online public register for the duration of your IVA and it will then be removed 3 months after it has ended.

If you have any concerns, speak with your Insolvency Practitioner. Alternatively, seek .