The first question that enters anyone’s mind when considering an Individual Voluntary Arrangement is: “How much will I have to pay towards my IVA ?”
Firstly, the IVA’s costs are paid for by the creditors named in the IVA, so however much you pay each month, it won’t include the IVA’s costs.
Quite simply, each Individual Voluntary Arrangement repayment is calculated on the affordability to an individual.
As such, each Individual Voluntary Arrangement is unique. Two clients with a similar level of debt could easily be asked to pay different monthly Individual Voluntary Arrangement contributions.
So how do you find out the true figure you will be expected to repay?
Some Individual Voluntary Arrangement (IVA) companies will simply tell you exactly what you want to hear… the bare minimum.
They would simply look at the level of your debt and calculate the minimum repayment that will allegedly ‘guarantee’ the Individual Voluntary Arrangement being acceptable to your creditors.
However, this may be unrealistic, and your creditors will not agree to a low Individual Voluntary Arrangement repayment without justification, especially when they have the chance to vote against it at a Creditors Meeting.
Take this link to find out how to calculate your monthly IVA repayment.
At My IVA Adviser, our team complete a thorough income and expenditure review to first see if the Individual Voluntary Arrangement is an option.
Once it has been agreed that the Individual Voluntary Arrangement is your most suitable option, and you are able to provide accurate details of your income and expenditure to the Insolvency Practitioner acting as your IVA nominee, we would be confident as to what your monthly repayment into your Individual Voluntary Arrangement will be.
All Insolvency Practitioners have a duty to both creditors and debtors, to only propose Individual Voluntary Arrangement cases which offer realistic levels of repayment.
In cases where an Individual Voluntary Arrangement repayment is suggested by the Insolvency Practitioner as affordable, but the debtor feels the repayment is too high, it is important to immediately inform the Insolvency Practitioner of the reasons why the repayment is unaffordable.
The Individual Voluntary Arrangement repayment will normally be required to continue for 5 years, and having a repayment set too high can only lead to the Individual Voluntary Arrangement being failed.
If you are not sure whether an Individual Voluntary Arrangement is a suitable option, why not ask ‘The Debt Calculator’ or alternatively call My IVA Adviser for free on 0800 088 7503 any time to speak to an Individual Voluntary Arrangement specialist.
For a full explanation of the IVA process take this link.