Individual Voluntary Arrangements (IVAs)
An IVA can be a monthly installment plan over a fixed term (usually five years), or a short term arrangement if you have a lump sum to put forward. Some IVAs are a mixture of both installments and a lump sum. Depending on your circumstances, you and your partner may be able to enter into an IVA together.
As with all forms of insolvency, you should consider all the alternatives before deciding on an IVA. These include:
Criteria for an IVA:
The IP will normally include an equity clause within your IVA proposal, which means that during the IVA (normally in year four) you would be expected to apply for a secured loan or remortgage to pay back some of the debt. If you are able to remortgage or get a secured loan, the repayments should be affordable. You should also be left with equity of at least 15% of the value of your share of the property. For example, if you are the sole owner of your property and it is worth £100,000, you should be left with at least £15,000 equity after remortgaging.
If you cannot remortgage or get a loan, you may be required to sell your home, however, you can keep paying installments under the IVA for an extra 12 months rather than selling your home. Alternatively, a third party such as a family member or friend could pay a lump sum to the IP. This lump sum would need to be 85% of the value of your share of the property (after the value of your share of any existing mortgages and secured loans has been taken away).