Do you qualify for an IVA?
To be eligible for an IVA with us, you must meet certain criteria:
- £5,000 or more of unsecured debt (i.e. credit that is not taken out against an asset such as property)
- A regular income which will allow you to make consistent monthly payments of at least £70 per month.
- Owe money to two or more creditors.
- Live in England, Wales or Northern Ireland.
1. Answer a few questions
Discuss your situation, and your income and expenditure, with one of our team to help us clarify whether you meet the IVA criteria.
We don’t judge, we’re just here to help.
2. Find a solution
If you’re eligible for an IVA and decide to proceed with our help, we’ll contact your creditors to let them know. If you don’t qualify for an IVA, we’ll let you know where you can go to find other help.
During the IVA application, we’ll deal with your creditors.
3. We put you first
Once on an IVA you’ll make one affordable payment to us each month. We’ll make dividend payments to your creditors in line with the terms and conditions of your IVA.
On successful completion of your IVA, your creditors should write off any remaining balance.
IVA example
Example based on a typical client, with approx. £31,000 of unsecured debts who completes a five year IVA and has no equity in any property.
| Typical monthly repayments | (60 months) £300 |
| Total paid by borrower (including fees) | £18,000 |
| Nominee’s fee | £2,500 |
| Supervisor’s fee | £2,750 |
| Supervisor’s costs | £290 |
| Total amount paid to creditors | £12,857 |
| Total amount written-off | £12,510 (40%) |
As a formal insolvency procedure, an IVA is a legally binding agreement with your unsecured creditors and requires an Insolvency Practitioner.
An IP is a qualified professional with the experience to handle insolvency cases. They will be responsible for ensuring your IVA is fair to both you and your creditors all the way through.
Alternative solutions to an IVA
Debt Management Plan
Debt management plans (DMP) are one of many available debt solutions that offer a flexible way to sort out your finances. They can change when your circumstances do giving you better control, whilst still making positive steps to reduce your debt.
Protected Trust Deed
Trust deeds are voluntary agreements available to residents of Scotland. You agree to repay part of what you owe them. A trust deed is similar to an IVA in allowing you to make affordable monthly payments within a formal arrangement.
Debt Relief Orders
Individuals with relatively low liabilities, small surplus income and few or no assets and who are possibly not in a position to pay off their debts in a reasonable time may be eligible for a debt relief order.
Debt Arrangement Scheme
A debt arrangement scheme (DAS) is a debt management program available to Scottish residents, which allows you to repay your debts over an extended period of time whilst providing you protection from your creditors.
Bankruptcy
Bankruptcy is a legally binding form of Insolvency and usually lasts 12 months. Most debts will then be written off. However, your assets may be sold to pay towards your debts. Your home may also be considered for sale if there is equity available.
Sequestration
If you currently live in Scotland, or resided there in the past 12 months, owe more than £1,500 in unsecured debts, and can’t repay your debts, you (or your creditors) can apply for sequestration.
Reviews of MoneyPlus Group
Benefits and considerations of an IVA
| Benefits | Considerations |
|---|---|
| One affordable monthly payment | You will agree to restrictions on your monthly expenditure to reach this payment |
| A clear timescale for clearing your debts, usually five years | The IVA will be listed on your credit file for six years and will have a negative impact on your credit rating for substantially longer |
| Protect your property from creditor action or forced sale | Homeowners will need to look into releasing equity into the IVA and if not possible, the term may need to be extended by 12 months |
| Freeze all interest and charges on included debts | Only unsecured debts can be included in an IVA |
| Prevent your creditors from contacting you directly or taking legal action against debts | Not all your creditors may vote on your IVA but 75% of those who do must vote to accept your IVA in order for it to be approved. There is no guarantee of this. |
| Write off any debt you can’t afford to repay on completion | If you do not adhere to the conditions, the IVA may fail which could lead to your bankruptcy |
What debts can and can’t be included in an IVA?
| Most unsecured debts can be included in an IVA | A few debts, however, cannot be included in an IVA |
|---|---|
| Credit cards and store card | Mortgages |
| Payday loans | Other secured loans |
| Personal loans | Hire purchase agreements |
| Overdrafts | Debts incurred through fraud |
| Gas, electricity, and water bill arrears | Court fines |
| Most instances of Council Tax Arrears | TV license arrears |
| Income tax/ National Insurance arrears | Student loans |
| Tax credit/ benefit overpayments | Child support arrears |
| Debts to family and friends | Social fund loans |