Questions

1. What is an IVA?
2. How do I know an IVA is right for me?
3. How does it work in practice?
4. Is my home safe?
5. Can you get joint IVAs?
6. Do all my debts go into an IVA?
7. How long does an IVA last?
8. Who needs to know I have an IVA?
9. I run my own business – can I still trade?
10. How long does it take to set up an IVA?
11. How do creditors’ meetings work?
12. What if my circumstances change during the course of my IVA?
13. What if my financial circumstances improve during the life of the IVA?
14. What fees do I need to pay?
15. Will my creditors still call me up while my IVA is being set up?
16. Can I still use a credit card during the IVA period?
17. Will I have to go to court?
18. I live with my parents – will they be blacklisted?
19. Can I still have a bank account?

 

1. What is an IVA?

IVA stands for Individual Voluntary Arrangement. An IVA is a simple arrangement in which you pay a single monthly sum to your creditors and become debt free within five years. It usually involves your creditors agreeing to write off part of your debt. It is a proposal you put to your creditors that they may prefer to agree to, to avoid you becoming a bankrupt. We at Platinum Debt Solutions  will assist you in putting together that proposal.
Back to questions

2. How do I know an IVA is right for me?

An IVA is a very flexible arrangement, so it works for a large number of people. We would need to sit down with you and discuss your particular circumstances to see if an IVA would provide you with the solution you are looking for. Typically, you would need debts in excess of £15,000 and an ability to make a monthly contribution of at least £200 for an IVA to work. Creditors generally expect you to have at least three other creditors before they will approve your IVA proposal.
Back to questions

3. How does it work in practice?

Simply put, there is a meeting between you and the Licensed Insolvency Practitioner. Platinum Debt Solutions collates the information necessary to put forward a voluntary arrangement proposal to your creditors. Your creditors will then decide whether to vote in favour of it. If they do, it is usually because the outcome for them is preferable to bankruptcy. If it’s approved at the creditors’ meeting, it’s as binding upon creditors as it is binding upon you. That means that creditors now have to deal with the Licensed Insolvency Practitioner – they cannot continue to harass you. Our duty then is to monitor the IVA for its duration, which is typically five years.
Back to questions

4. Is my home safe?

Creditors entering into an IVA accept that mortgage payments are a priority – it’s one of the major reasons people choose an IVA over bankruptcy. However, each part of your IVA is individual to you. You come up with a proposal that deals with each of your assets in turn. People occasionally decide that they are willing to sell their home and allow the proceeds of sale to go to their creditors. More often, people want to stay in their home for the duration of the IVA and beyond it. That’s often what’s really important to you. So what we’d be looking for is a proposal that provides monthly payments over a five-year period. So long as you maintain your monthly mortgage and IVA payments your home will be safe. If you have equity in your home, most of it (typically 75%) will need to be paid into your IVA. However, this money is generally paid within the last two years of your IVA, enabling you to remortgage your property.
Back to questions

5. Can you get joint IVAs?

When we deal with husbands and wives or mutual partners, each of you is dealt with separately. You can have a joint IVA if you have a number of debts in common. But it could be that one of you needs to do a voluntary arrangement and one of you needs a debt management plan. Or one of you, perhaps, need do nothing. Rarely, one of you might be looking to go bankrupt. So it’s a case of looking at the whole picture to see what is appropriate for each individual concerned.
Back to questions

6. Do all my debts go into an IVA?

All of your debts will be dealt with in one form or another. There will be priority debts, like mortgage payments and hire purchase agreements. These come first. We look at these - and your cost of living - and we calculate what surplus is available for the general body of unsecured creditors. Unsecured debts are usually amounts due to credit card companies, consolidation loans and bank overdrafts. There are certain categories of creditors which do not form part of an IVA, like criminal penalties (such as car parking fines), matrimonial settlements and some student loans.
Back to questions

7. How long does an IVA last?

IVAs typically last for a five year period. Creditors normally do not want to see any arrangement that lasts much longer than that. IVAs can be for a much shorter time frame. If, for instance, you have a friend or relative willing to give you money that can be offered to the creditors in full and final settlement, this can be organised quite quickly. An IVA can last for as little as 12 weeks.
Back to questions

8. Who needs to know I have an IVA?

The people who need to know you have an IVA are your creditors, because the Licensed Insolvency Practitioner must give every creditor notice of the creditors’ meeting. That includes secured creditors as well as unsecured creditors. So your mortgage company will know about it as well as your credit card companies and your bank. The people who don’t need to know about it are your employers. Unless, of course, your employer is a bank or credit card company to whom you owe money. And we do have to register your IVA with the Department for Trade and Industry (DTI), which keeps track of all IVAs and may pass this information on to credit rating agencies.
Back to questions

9. I run my own business – can I still trade?

One of the real benefits of an IVA is that it allows business people to continue trading in their own right, so your business should continue unhindered. Obviously, if you need to incur credit during the IVA process, this needs to be discussed with your Licensed Insolvency Practitioner to understand how it will be structured. None of us want to see you get into further debt problems.
Back to questions

10. How long does it take to set up an IVA?

First, you provide us with detailed information on your debts and your expenditure. Next you meet with a Licensed Insolvency Practitioner who drafts a proposal, files it at court and sends it to your creditors. Creditors then need three full weeks between receiving the proposal and the creditors’ meeting to consider their response.
Back to questions

11. How do creditors’ meetings work?

The creditors will vote at a creditors’ meeting to decide whether or not they agree to the IVA that you’ve proposed. Creditors won’t usually vote in person, but by proxy. So it’s a paperwork exercise. Creditors will submit their proxy voting either for or against a voluntary arrangement proposal. For the arrangement to be approved, 75% in value of the creditors have to say yes. That’s 75% in value of the creditors who bother to vote at the meeting. So if, say, the only creditor to vote was a mail order company to which you owed £500 and they said yes, the IVA would go through, even if you owe £60,000 to other creditors which haven’t voted.
Back to questions

12. What if my circumstances change during the course of my IVA?

Within the IVA proposal we create what’s called a 'variation clause'. This allows us to call another meeting of creditors to address any changes in circumstance. If a person loses their job and cannot afford to meet their monthly payments, we call a meeting of creditors to consider giving that person a payment holiday of up to six months. This gives them time to find a new job, get back on their feet and resume payments into their IVA. Those six months are added on to the end of the IVA.
Back to questions

13. What if my financial circumstances improve during the life of the IVA?

The creditors will be looking for the upside in any proposal put forward. So Platinum Debt Solutions IVAs include what we call a windfall clause. This means that, if there is a windfall – somebody dies and leaves you some money, or you win the lottery – that money will be paid into the IVA for the benefit of your creditors.
Back to questions

14. What fees do I need to pay?

Platinum Debt Solutions doesn’t charge any upfront fees. You go into the IVA signing a proposal that goes to creditors and the fees are stated in that proposal.
Back to questions

15. Will my creditors still call me up while my IVA is being set up?

During the period your IVA is being set up, creditors and debt collection agencies are likely to continue to phone you. You just have to tell them you are doing an IVA with Platinum Debt Solutions and they should mark your file forward for seven to eight weeks to allow the creditors’ meeting to be called.
Back to questions

16. Can I still use a credit card during the IVA period?

In theory you can have a credit card right up until the date of the creditors’ meeting. But we don’t want you to get into any further debt, so from today your credit card should be destroyed with a view to sending it back to your creditor on the day of the creditors’ meeting.
Back to questions

17. Will I have to go to court?

The court procedure is dealt with entirely by Platinum Debt Solutions. You will not have to appear. We arrange for all the papers to be filed at court and, in the extremely unlikely event that there is a hearing, we will attend on your behalf.
Back to questions

18. I live with my parents – will they be blacklisted?

The days when addresses were so-called 'blacklisted' are long gone. The individual's name, rather than their address, is what is listed. Your parents or any other people you live with will not be held liable for your debts, unless you hold debts jointly.
Back to questions

19. Can I still have a bank account?

During the IVA you should have no difficulty obtaining a bank account, but it must be a bank account that is not capable of going overdrawn. So you will not be allowed a cheque guarantee card.
Back to questions

---