Copyright 2006 The Debt Free Student
How to enter into an IVA
Recommended IVA specialists
An IVA is a formal arrangement to pay off a portion of your debt over an agreed period - usually at least 25% over three to five years. You can only enter an IVA if you owe at least £15,000 (BUT see Simple IVA) to two or more lenders.The interest on the debt is frozen and the debtor is declared DEBT FREE at the end of the period.
An IVA must be set up by an authorised insolvency practitioner (see opposite) who will agree a schedule of payments with your creditors. The practitioner will also charge a fee. The fees vary, so enquire with your chosen provider. You might have to pay the fee upfront, although many firms will let you spread the cost over monthly instalments.
You may have read in the press that some financial experts fear that debt companies are pushing people into IVAs because they earn high fees. There are -as always - people in the financial industry who are not giving the best advice either for the debtor or the lender. Some advisers charge the debtor upfront to arrange an IVA, which is not refunded if no agreement is reached.
We recommend the IVA specialists listed opposite based on the level of service they provide and their reputation within the industry.
You should beware companies that promise to cut your debts by 90% or so. Such promises can be misleading because the creditors are unlikely to agree to such a chunky reduction in the amount you owe.
It is also quite common for an insolvency practitioner to put together unrealistic proposals - perhaps suggesting that the debtor makes monthly payments that he or she cannot afford. So the IVA fails. The client is then back to square one, but the firm still pockets its fee.
Entering into an IVA is a commitment that should not be undertaken lightly. If it seems an attractive option to you, please contact one of our recommended specialists.
An IVA must be set up by an authorised insolvency practitioner (see opposite) who will agree a schedule of payments with your creditors. The practitioner will also charge a fee. The fees vary, so enquire with your chosen provider. You might have to pay the fee upfront, although many firms will let you spread the cost over monthly instalments.
You may have read in the press that some financial experts fear that debt companies are pushing people into IVAs because they earn high fees. There are -as always - people in the financial industry who are not giving the best advice either for the debtor or the lender. Some advisers charge the debtor upfront to arrange an IVA, which is not refunded if no agreement is reached.
We recommend the IVA specialists listed opposite based on the level of service they provide and their reputation within the industry.
You should beware companies that promise to cut your debts by 90% or so. Such promises can be misleading because the creditors are unlikely to agree to such a chunky reduction in the amount you owe.
It is also quite common for an insolvency practitioner to put together unrealistic proposals - perhaps suggesting that the debtor makes monthly payments that he or she cannot afford. So the IVA fails. The client is then back to square one, but the firm still pockets its fee.
Entering into an IVA is a commitment that should not be undertaken lightly. If it seems an attractive option to you, please contact one of our recommended specialists.
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