Individual Voluntary Arrangement (IVA)
Benefits of an IVA
- Reduce the amount you pay each month
- Write-off a proportion of your debts
- Usually lasts 5 years
- Avoid repossession and keep your home
- Stops creditors hassling you
- Legally binding agreement
Do I qualify for an IVA?
Until an advisor has spoken to you in detail we just don’t know yet. Request a call back and we’ll answer all your questions.
What will Pathfinder Financial Services do?
If the IVA is the best solution for you, we will make a proposal on your behalf to your creditors and ask them to vote whether or not to accept the proposal. Over the last 12 months’ more than 95% of our proposals to creditors were accepted. After your IVA is approved we will write to all your creditors and let them know your IVA is approved
How much will I pay?
We look at all your income and reasonable outgoings and arrive at a fair offer to make to your creditors. The amount you will pay is not determined by your level of debt, it is based on what you can sensibly afford to pay. It doesn’t matter whether you are employed, self-employed or retired; we can even make offers which reflect where someone’s income fluctuates throughout the year. We will not propose an offer which you do not feel is affordable.
What are the fees for an IVA
In an IVA you must not be charged any administrative fees. Everything you pay must be paid into the arrangement. The creditors decide what we will be paid and after your IVA is approved they will allow us to take our fee from the contributions you make into the arrangement. If for any reason the creditors do not approve your IVA, you do not owe us anything.
Typical Example of an IVA
- Overdraft £1,900
- Payday Loan £970
- Personal Loan £9,800
- Credit Card(s) £12,300
- Previous years Council Tax £1,100
Total Debt £26,070
Contribution to creditors £187 per month x 60 months = £11,220
Writing off £14,850 (57% of your total debt)
Includes all fees approved by your creditors with our Insolvency Practitioner
How is a homeowner affected?
The IVA is probably the only solution which fully protects your property. The IVA prevents a creditor from securing a debt against your property with a Charging Order. You cannot be forced to sell your home.
If you have equity in your property the creditors may only accept your proposal if you agree to try and release some of it in the last year of the arrangement. If your mortgage company is prepared to allow you to release equity there are a number of safeguards to ensure the amount released is fair and the repayments reasonable. Where you do have equity and are unable to release it the creditors may ask you to pay into the IVA for an additional 12 months in lieu of releasing any equity.
If you break the arrangement with your creditors and the arrangement fails you will lose the protection the IVA offers to a homeowner.
What if my circumstances change during the IVA
Creditors understand that a lot can happen while the IVA is in progress, and that something could change, making it difficult (or impossible) for you to keep up with your payments. You could lose your job, for example, or your rent/mortgage/utility bills could rise more rapidly than expected. You should always stay in touch with us because we’re here to help.
We can make variations to your arrangement and for substantial changes we may need to ask your creditors. Once an IVA is approved, we, you, and your creditors – want it to succeed. Sometimes an IVA will fail and you will need to consider other solutions to resolve your debt problems.
How is my credit rating affected?
Whenever you fail to make full contractual payments to your creditors your credit score will be impacted. Your credit file will show you are in an arrangement for 5 years and then for one year afterwards your credit file will show “arrangement satisfied”
Once your IVA is approved:
- We will handle correspondence with your creditors.
- You will have legal protection from creditor action – as long as you comply with the IVA terms
- You will have monthly payments you know you can afford
- Your home will be protected from repossession, although you may need to release equity.
- You will get a dedicated professional who will regularly review your circumstances to ensure you’re in control of your finances
What do I do next?
Find out exactly whether an IVA is right for you and talk to one of our advisors
Call 0845 274 8000 or 0161 787 3440