IVA Articles
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IVA : How Much Will My IVA Monthly Repayment Be?
Each IVA or Individual Voluntary Arrangement is unique.
Each person that enters into an Individual Voluntary Arrangement has personal circumstances different from anyone else.
Some people may have a property with equity which may need to be considered, some may not. Some may have a large family, yet others may live alone.
The size of debt in each Individual Voluntary Arrangement is unique too. At myIVA-Adviser.com we see a huge range in unsecured personal debts, from £15,000 to £300,000.
Yet even though an Individual Voluntary Arrangement monthly repayment is calculated in the same way for each case, the actual monthly repayments will vary substantially, depending on the personal circumstances of each case.
The main emphasis on how to calculate the repayment is on affordability. After all, there is little point in arranging to make repayments into a new agreement if those repayments are too high to be able to afford them for the 5 years of the Individual Voluntary Arrangement.
There is a minimum repayment ratio that, below which, the creditors will not accept for an Individual Voluntary Arrangement. Historically this has been set at 25% of the original debt plus the costs of the Insolvency Practitioner, although recently some creditors have instructed Insolvency Practitioners that their minimum repayment requirements are now higher. In some Individual Voluntary Arrangement cases this repayment can be as high as 40% repayment of the original debt plus costs.
But as long as the repayment for the Individual Voluntary Arrangement is higher than this pre-set minimum, the rest is based on personal circumstances.
The monthly repayment has to be seen to be a fair, affordable and sustainable amount, and has to be equal to the debtors disposable income. This means that a persons monthly income is taken, and all that person's reasonable monthly living costs are deducted from it.
The figure that remains is the disposable income, and if this figure is above the minimum monthly acceptable level, and can be proved to be fair ( i.e. no over inflated expenses), then that would be the monthly repayment for the Individual Voluntary Arrangement.
For any further information about Individual Voluntary Arrangements your may require, go here or call myIVA-Adviser.com on 0800 088 7503 now.
