FAQs
Here are some of the most frequently asked questions about IVAs and the impact they have on your finances and your future. Do please get in touch with us if there is anything else you would like to know.
- > What is an Individual Voluntary Arrangement (IVA) and how does it work?
- > How much do I pay?
- > What are the alternatives to an IVA?
- > What are the advantages of an IVA?
- > Will I have to pay for this service?
- > How long will it take?
- > How long does it take to set up an IVA?
- > Will my creditors continue to chase me for payment?
- > How much will I need to repay?
- > Can I keep my house?
- > Is Tenon debt solutions regulated?
- > What do I have to do next?
What is an Individual Voluntary Arrangement (IVA) and how does it work?
- > An IVA is an alternative to bankruptcy
- > It is a contract between you and your creditors, with very flexible terms
- > Typically, you pay an agreed monthly sum for up to five years. This is divided up between your creditors, who accept the sum in settlement of the amount you owe them
- > You pay a percentage in the pound to your creditors – the remaining balance is written off
- > You can propose a single IVA, or if you and your partner both have debts you can propose IVAs which are to be considered jointly
How much do I pay?
- > The monthly payment agreed with your creditors depends on your income and expenditure – it is made affordable to you and should provide your creditors with the best achievable return
- > A standing order is usually set up to pay monthly
What are the alternatives to an IVA?
- > You could declare yourself bankrupt or borrow more money in order to consolidate your debts
- > You could speak to a debt counsellor at your own bank or building society in order to deal with your debt problems
- > You could ask your creditors to reschedule your debts – difficult if you have a large number of creditors. Any such agreement reached is informal, not legally binding like an IVA
What are the advantages of an IVA?
- > You make one payment by standing order each month. That payment won’t vary during the IVA unless your circumstances change and you can afford more
- > All of your creditors are legally bound by the terms of the IVA as long as you keep paying your agreed monthly sum
- > When all instalments have been paid (usually after five years) you have no further obligations to your creditors. At this point you can stop paying the monthly sum
- > Your employers should not know about your IVA unless you choose to tell them. An IVA is not advertised unlike bankruptcy.
Will I have to pay for this service?
- > Your monthly IVA payment goes to your creditors – we agree our costs with them and they pay our fee from that payment
- > At the end of the IVA your debts are satisfied in full and there is nothing further to pay
How long will it take?
- > A typical IVA runs for five years
- > At the end of this period, if you have kept up monthly payments, you’ll have nothing further to pay as creditors will have agreed that your debts are discharged
How long does it take to set up an IVA?
- > An IVA can take as little as six weeks to set up
- > Of course we do need you to provide any information we request promptly
Will my creditors continue to chase me for payment?
- > Right at the start of the process, Tenon debt solutions will contact your creditors and confirm that you are taking advice from us
- > If more than 75% of your creditors approve your proposals then all creditors are bound by the terms of your IVA. Creditors should not, therefore, continue chasing you for payment
How much will I need to repay?
- > This depends entirely upon your particular circumstances
- > An IVA should provide creditors with a return which is at least as good as the return that they could expect in bankruptcy
- > The agreement should be your best proposal to creditors
Can I keep my house?
- > If you own your house, it is unlikely you will have to sell this as part of an IVA
- > An IVA will provide you with an opportunity to realise some equity for the benefit of creditors, usually by way of a re-mortgage
- > Re-mortgaging usually happens during year four of the IVA
Is Tenon debt solutions regulated?
- > Yes, our licensed insolvency practitioners are regulated by a number of professional bodies including the Institute of Chartered Accountants of England & Wales
What do I have to do next?
- > Contact Tenon debt solutions and we will let you know whether or not an IVA is a suitable option
- > If an IVA is a good solution to your problems, we will contact your creditors and draft all of the documentation needed
- > If an IVA is not an option we will advise you of the alternatives.