Debt Issues: Welcome to Iva Uk
When asking prospective clients in the UK if they have ever been in an IVA the most common response I get is ‘what’s an IVA?’
20 years ago in 1986 the insolvency act introduced the IVA. IVA stands for Individual Voluntary Arrangement A formal, it is court ratified, process that allows somebody struggling with unsecured debts to make a payment proposal to their creditors.
IVA numbers are increasing dramatically at the time of writing. A record number of people in England and Wales went insolvent between July and September 2006. The Insolvency Service said 27,644 people went bankrupt or entered into Individual Voluntary Arrangements to manage their debts.
Why are IVA’s proving to be ‘popular’?
Creditors like them because it can often provide greater returns than would normally be realised if the debtor went bankrupt.
Debtors like to make use of an IVA because it freezes interest on debts, it makes the payments more manageable, it protects their home, it is a very discreet debt solution (unlike bankruptcy) and allows company directors to retain their position.
After a period of normally 60 monthly payments, any outstanding amounts of unsecured debts included in the IVA are written off.
That sounds great, how do I organise an IVA?
Well initially your unsecured debts need to be in excess of GBP15,000. If you have more than GBP15,000 of unsecured debts and are struggling with debt repayments then it’s time to talk to a professional.
Only qualified professionals can administer an IVA. This is usually an insolvency practitioner but there are a number of firms that have sprung up to effectively ‘package’ an IVA ready for the insolvency practitioners to complete the IVA. The insolvency practitioner then becomes the trustee for the IVA.
To get an IVA agreed, a clear statement of your financial position will need to be drawn up. This will include all assets (house(s), cars, endowment policies, cash plans, pension details, etc) and then details of your monthly income and expenditure.
All these details are put to your creditors along with a proposed monthly payment.
What about my house?
Importantly, if you own your own home, then any equity you have available in the property will form part of the IVA proposal as part of the repayment offer. A secured charge is applied to your property equivalent to the proposal put to the creditors. The charge is normally applied to your property during the first year of the IVA and normally realised in the fourth year of the IVA.
If the property is jointly owned then only the debtors share of equity is normally considered under the IVA.
So what happens when the creditors vote on my IVA?
The creditors vote on whether to accept the IVA proposal or not. If more than 75% by value of unsecured creditors vote in favour of the IVA then it has to be accepted by all the unsecured creditors.
What do you mean more than 75% by value?
Well if you have 4 creditors but say one of them is owed 76% of your total amount of unsecured debts then it is only their vote that counts. If they accept the IVA proposal then the others will have to accept payments. Equally, if the 76% creditor declines the IVA proposal then the whole proposal has been rejected.
What happens if my IVA is rejected?
Well first thing, remain calm. There is an opportunity to submit an improved IVA proposal if your funds allow. Failing that it may be time to consider an informal payment plan or perhaps even bankruptcy. This is best discussed with a debt help and advice professional.
What if I miss any of my IVA payments?
A well drawn up IVA will allow for one or two missed payments in the IVA but missing payments is a serious business. The IVA is a court ratified agreement. Missing payments in an IVA runs the real risk that the trustee will legally have to force you into bankruptcy.
What happens to the IVA if my circumstances alter?
If your circumstances alter then this needs to be reflected in your IVA. That means should your income fall then the repayments should also be reduced. Equally, where your income improves then more money will be made available each month to your creditors.
Well I made it to the end of my IVA, what now?
The trustee will issue a ‘Statement of Completion’ normally within 3 months of the last payment of the IVA. The trustee will also notify the Insolvency Service and reflect this in their records.
Finally, do be aware and get proper IVA advice.
Do sit down and get an experienced professional to go through everything in detail. Be aware of all the factors that will affect you if you decide to enter into an IVA. Whilst this article is accurate, it cannot be used to replace advice from a professional organisation.
Ed Pearson is a Debt Dr. Debt Dr specialise in debt help and advice for individuals and small businesses. Ed can be contacted on 0845 123 4000 or in confidence on 07970 659266.
http://www.debtDr.co.uk ‘prescribing life without debt’
This article does not constitute regulated advice. Please remember that any action regarding financial advice should always be taken only after considering the specifics of your own situation.
To find out more about Ed try, http://www.ecademy.com/account.php?id=41788
Watch the video related
Most debt consolidation companies do nothing better than simply ruin your fico score in order to settle your debt. If you really want to work with an agency that will help you reduce your debt, contact a company member of “CONSUMER CREDIT COUNSELING SERVICES” (CCCS) More info at: sccrealestateuncensored.com/2008/repair-credit-legally-remove-negative-accounts/ micasamidinero.com/2008/reparo-credito-eliminando-legalmente-cuentas-negativas/
Help answer the question
How to claim debt which is linked to a property from executors who have not issued their probate?
If there is a debt on a property owned by a person who is now deceased, how can the debt be collected if the executers do not issue their probate?
The executers have been asked to pay the debt however because they are not issuing their probate I cannot claim the money owed to me from them. It has been quite some time since they were asked to pay the debt. Any advice on how I can get my debt.
debt
Tags: agile, Bankruptcy Uk, Debt, Debt Help Uk, extreme, Iva Uk, metaphore, refactoring, UK Debt Consolidation
This entry was posted on Wednesday, August 5th, 2009 at 4:21 am and is filed under Debt. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
August 5th, 2009 at 4:41 am
I would seek a financial professional. I met with a Primerica representative and they help me get out of debt. There is no fee to see them and they gave me a free financial needs analysis. Since they don't charge clients anything, they do ask for referrals, which I had no problem with.
August 5th, 2009 at 4:53 am
I wouldn't use any of them they are rip off artists. They take your money and do nothing, been there done that. Go to Consumer Counseling, in every city or county, it is free, non profit and they don't charge but they will contact all the places you owe money to and get you with lower payments and great ways of getting out of debt !! They are well known by all companies and acknowledge Consumer Credit Counseling as serious and good to work with .
August 5th, 2009 at 5:12 am
Very misleading,she is talking about settlement,NOT consolidation. Consolidation is just combining all of your credit cards and paying 1 monthly bill.
August 5th, 2009 at 6:05 am
What she doesn’t mention is that not evryone qualifies for a debt management plan and in some instances settlement and bk are the only option.
August 5th, 2009 at 6:16 pm
Do not talk with debt collectors over the phone. No mather how smart you think you are, they are trained to get the best of you.
Instead send them a letter stating that the cannot contact you by phone anymore. Any contact has to be by US mail to an address that you specify. Send letter by certified mail and keep copies for your records.
Never reveal any personal information to a debt collector. They will use it against you. Don't appear desperate, just play the waiting game with them. Remember, that you have the power, you have the money, and they are the ones who want to get their hands on it.
If they come up with a settlement that seems fair to you, include a "pay for delete" agreement. Don't pay them a dime before they agree to delete all derogatory information they have placed in your credit files. It is very important that you get the agreement in writing first before you pay.
Good luck.
August 5th, 2009 at 8:02 pm
The title is completely misleading! Debt settlement and debt consolidating are different!
August 6th, 2009 at 3:43 am
this is so much fun…..hell with the cards
August 6th, 2009 at 4:36 am
What she says is really true. I used to work for a collection agency and I had a $30000 account. I settled it for $8000 and that is all I needed to make my quota and get like $1000 commission for the month. I didn’t care if I got the balance.
August 6th, 2009 at 7:05 am
don’t own a credit card, if just that simple
i have owned one in the past and got rid of it as soon as i first used it for a large payment
August 6th, 2009 at 7:55 am
Forever. After 4 years it should already be in collections. Oh – yeah.
August 6th, 2009 at 3:20 pm
The title is a little ridiculous to say debt consolidation is a scam. Yes there are some rogue companys but there are others who can be very helpful
August 7th, 2009 at 2:41 am
A good reputable debt settlement company will “NOT” charge you an upfront fee!! Most cc companies will not settle with a consumer, they mostly make a deal on the interest that they and then compound that interest at the end of the deal. DS uses collective bargaining… Do your homework Suze!! Writing an agreement on your check mean NOTHING! Check out Banking regulations! You get a letter of the terms prior to sending a creditor anything! They do not have jurisdiction over the IRS.Come on
August 7th, 2009 at 5:35 am
suze makes a nice milf.
August 7th, 2009 at 6:23 am
If you are in the US the executors have a time limit to execute the will. I would speak with someone at the Register of Wills in the county where the will is registered. I was an executor once in Maryland I had one year to fulfill the will but I did have the option to petition the court for a 6 month extension.
Wikipedia Probate excerpt:
"After opening the probate case with the court, the personal representative inventories and collects the decedent's property. Next, he pays any debts and taxes. Finally, he distributes the remaining property to the beneficiaries, either as instructed in the will, or under the intestacy laws of the state.
A party may challenge the probate, either by petitioning the personal representative or the court. If the claim is rejected, the claimant may file a lawsuit to prove the claim. Such challenge may force the court to scrutinize the probate in further detail.
The personal representative must understand and abide by the fiduciary duties, such as a duty to keep money in interest bearing account and to treat all beneficiaries equally. Not complying with the fiduciary duties may allow interested persons to petition for the removal of the personal representative and hold the personal representative liable for any harm to the estate".
August 7th, 2009 at 1:22 pm
Most of the debt repair/consolation/settlement companies want their fees up front and leave you credit trashed.
Check nfcc.org for listings legit non-profit credit counseling services. They can help you set up a budget and work out clearing up your debt.
You can tackle your debt yourself by putting every extra penny on the highest interest rate debt, while making minimum payments on the rest. When the highest is paid, move to the next, till they are all paid off.
It will take 2 or 3 years but if you work at it, you'll be out of debt with a good payment history.
August 8th, 2009 at 4:12 am
You are always repsonibile, there have even been cases where peoples social security checks were partially taken until their old student loans were repaid. of course this is extreme but possible.
August 8th, 2009 at 2:48 pm
lol u have western civ at cw post???
August 8th, 2009 at 4:14 pm
Debt is not budgeted. Debt service is budgeted. For example, anticipated interest payments, amortization of bond principle, fees, etc. Good question! Should be included in the budget list.
Think tax rates will need to rise? I think so!