IVA FAQs
Q. Will the IVA affect my credit rating?
A. You should expect that your credit rating will be adversely affected by going into an IVA. An IVA is a formal legal agreement and will affect your credit rating for up to 72 months after completion.
Q. Do I have to be in full time employment?
A. No. To enter into an IVA, you only need to have a surplus of income above what you need to live on.
Q. Will the IVA prevent my creditors taking further recovery action?
A. Yes. Once the IVA is in place, you are protected from all further recovery action by your unsecured creditors providing you agree to the terms of the arrangement.
Q. Can an individual creditor refuse to accept an IVA?
A. Yes, but only if they are owed more than 25% of the total debt and at the creditors meeting they vote against the proposal. Once the IVA has been accepted, all creditors are bound by law to accept the arrangement.
Q. Do creditors have to accept an IVA?
A. The decision to accept or reject an IVA is made by a vote of your creditors at a creditors meeting. You need to get 75% acceptance by debt value at that meeting for the IVA to go ahead. If less than 75% by debt value vote to accept the IVA, the IVA will fail.
Q. What happens if the IVA is not approved?
A. You will have to come to an alternative arrangement with you creditors to repay your debts. We may be able to offer you an alternative solution.
Q. What if my circumstances change?
A. If you are unable to maintain repayments because of changed circumstances, your supervisor in the IVA can request a variation to reflect your new circumstances.
Q. Does an IVA cover all of my debts?
A. No. An IVA can only cover your unsecured debts and arrears.
Q. If I am a homeowner, will I have to release equity in my home into the IVA?
A. You may have to release a proportion of any available equity in any property you own as part of your overall contribution to your creditors. This will usually happen after the 4th year of the IVA.
Q. Can I cancel the IVA once it is set up?
A. No. An IVA is a legal process and, once it is set up, you cannot just cancel it if you change your mind.
Q. How are the Insolvency Practitioner's fees collected?
A. The Insolvency Practitioners fees are collected from the payments you make into the IVA and will be notified of the fees that apply in advance.
Q. How long will the IVA last?
A. This can vary, but it usually lasts for up to 5 years.