Looking for An IVA in Northern Ireland

Individual Voluntary Arrangements (IVA) are a common solution for people who owe over £12000 to multiple creditors and are struggling to make their repayments. While entering into such an arrangement will have considerable repercussions for an individual's credit history/score, in most cases, it is a better solution compared to bankruptcy. Residents of Northern Ireland have the same legal protection as those in England and Wales (Scotland has different rules), and applicants must follow a certain process which is conducted and arranged by a third party.

Calculating Affordable Payment Plans

Those who apply for IVA protection will need to calculate everything that they currently owe to each of their creditors under their current arrangements. An IVA administrative company will then look at the total amount being paid out to meet the minimum repayments inclusive of interest. Often this will be several hundred pounds – a figure that cannot be reliably met – and is likely going to cause the applicant to need to rely on further loans (often very high interest) to meet their living costs.

IVAs exists to prevent an existing circle of debt becoming ever greater by establishing a realistic figure that can be met and agreed to over a 60 month period. Applicants are free to let their IVA arrangement company, negotiate an affordable repayment structure with their creditors. It is far from uncommon for repayments to be reduced by two thirds or even more depending on their employment and financial statement. For example:

Someone paying £750/month to service outstanding debts may be able to pay as little as £250/month. Their repayment is taken as a lump sum on a set date per month, which their IVA administrator will then split between creditors. Regardless of any changes in circumstances that agreed upon figure will not change. Once 60 months have passed, and providing payments have been met as agreed, any outstanding monies owed is written off completely.

Setting Up An IVA

Should you be wiped out by debt repayments every month, then it is important to look for a company who can help as soon as possible. The longer you leave it, the more you will unnecessarily struggle and the greater the chance that the debt will just continue to grow. Although total applications have declined in recent years, figures show that thousands of people continue to use these as a financial lifeline. There is no shame in facing up to your financial problems and seeking help – as they really will not just go away on their own. When choosing an IVA Northern Ireland based company, make sure that they will handle as aspects of the agreement, from collecting and distributing payments to negotiating amounts with creditors.

Applicants will need an Insolvency Partner (IP) to act as the ‘middle-man' in your IVA agreement. Before approaching creditors, they will establish a realistic figure that an individual can afford. Exactly what this amounts to depends on a variety of criteria, but in all cases, it will be well below what is currently being paid. Once negotiating an IVA has begun applicants are under legal protection – and their creditors cannot contact them demanding payment. All correspondence is handled by the IP on their client's behalf.

IVA Advantages

It is important to approach an IVA in a different manner to how one would consider bankruptcy. IVAs can and in most cases will result in the effective writing-off of a significant amount of debt, but under the basis that some funds (over 60 months) are going to be formally recovered. Every negotiation and personal circumstance is different, but as a general rule IVAs have the following advantages:

  • All interest is immediately frozen.
  • IP administrators require no upfront fees. Anyone can use their services.
  • Legal protection from creditors (including non-court appointed bailiffs and collection agencies).
  • All debts consolidated into one single monthly payment.
  • Flexible time periods depending on affordability and circumstances.
  • Can be arranged for anyone, regardless of employment/relationship/housing status.
  • Fast to set up, typically no longer than four weeks and often much quicker.

IVA Disadvantages

As outlined above it is essential to understand that this is an arrangement that must not be broken. Failure to make just a single payment will invalidate the IVA contract and allow creditors to take much more punitive action (should they choose).

  • Failing to meet IVA payments can make creditors force you to declare bankruptcy.
  • Homeowners with equity may be expected to take out IVA for longer periods or remortgage.
  • Should your financial position worsen (unemployment/sickness) and you cannot make payments, then it is up to creditors to decide whether or not they are willing to change agreed amounts. You will still be liable for outstanding monies owed.
  • It will show on your credit history for six years.

So should you apply for an IVA? Many thousands of people have been helped by doing so, yet it is essential to understand the potential risks should you fail to meet your side of the agreement. When properly serviced an IVA can provide without question the best way to get your finances back on track with the future in mind. In most cases, it is a far preferable option than bankruptcy or spending many years unhappily struggling to make unaffordable payments.

It is essential to be absolutely transparent when setting up a realistic monthly budgeting plan. Do not overstate your income or underestimate your expenditure. Providing that these are both realistic and adaptable a good IP will be able to negotiate a much-improved level of repayment with all of the owed creditors.

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