Will an IVA affect my credit rating?

Understandably, an IVA will be recorded on your credit file for a total of six years from the approval date. During this period, your credit score may be negatively affected, potentially making securing loans, mortgages, or additional credit challenging.

Nevertheless, there are measures you can implement to restore your credit after completing your IVA. Creditors may be more inclined to grant you credit if you have demonstrated consistent, full, and timely monthly payments.

What does an IVA cost?

The cost of an Individual Voluntary Arrangement (IVA) varies for each individual, and this amount will be clearly stated in your IVA proposal. At IVA Helpline, we ensure that you are fully aware of the total cost before your IVA is approved and you begin making payments.

Additionally, any fees related to your Insolvency Practitioner (IP) will be incorporated into your monthly payments, eliminating the possibility of hidden or unexpected charges. Apart from your monthly repayments, you should anticipate a Nominee’s Fee and a Supervisor’s Fee as part of the overall cost.

Nominee’s Fee

During the initial year of your IVA arrangement, the Nominee’s Fee is disbursed directly to your creditors, typically within the first five months. This fee covers the necessary expertise and time required to prepare your IVA proposal.

The amount can vary based on the agreement reached with your creditors, usually ranging from £1,000 to £2,220.

Supervisor’s Fee

The Supervisor’s Fee is charged upon the approval of your IVA and consists of monthly payments made concurrently with your regular contributions to cover the specialized services provided during the agreement’s duration.

The fee amount may differ, but it will never exceed 18% of your total contributions throughout the entire IVA term. As IVA Helpline, we aim to ensure that our services are tailored to your financial needs while maintaining transparency in our fee structure.

What is an Additional Income Threshold?

Upon approval of your IVA, our Insolvency Practitioner (IP) will determine the Additional Income Threshold, which indicates the amount you can earn before contributing to your arrangement.

Typically, this threshold is around 10% of your monthly income. For instance, if your monthly earnings are £1,000, you can earn an additional £100 without having to contribute to your IVA. However, should you earn an extra £125 beyond your regular income, 50% of this amount must be paid into your IVA.

This approach allows you to save money while simultaneously repaying your debts, an outcome that can be challenging to achieve with other debt solutions. Additionally, throughout your IVA term, you must adhere to specific spending restrictions, such as not borrowing more than £500 without obtaining consent from your IP.

Can my IVA payments be reduced?

If you find it challenging to manage your finances after making your IVA payments, you may be able to decrease your monthly contributions. An Insolvency Practitioner (IP) can facilitate a reduction of up to 15% without needing your creditors’ approval.

However, if you wish to lower your payments by 15% or more per month, your IP must obtain consent from your creditors, which might result in an additional fee. Alternatively, an IP can assist you in deferring a monthly payment, temporarily reducing your payment amount, pausing your payments for a specified duration, or sometimes settling your IVA ahead of schedule.