What is an IVA?

IVA stands for "Individual Voluntary Agreement". It is an ethical and moral way of reducing debt and is also a legally binding agreement between you and creditors included within the IVA.

An IVA allows you to make an arrangement with your creditors to pay off all your debts with affordable monthly payments. The time frame for such an arrangement is usually five years. Once accepted by your creditors, the interest rates and charges are frozen and companies will stop hassling you to make payment.

Once you have completed your IVA and made the final contribution you will not owe any more to the creditors included within the IVA. That means if all your creditors are in the IVA you will become debt free. It is common for individuals in an IVA to only pay 20-50% of their debt back to those creditors in the IVA.

Why should you choose Hamilton Wentworth?

All the advice you will receive is from Licensed Insolvency Practitioners by the institute of Chartered Accountants in England and Wales. The advice is completely confidential and free of charge.

How does an IVA actually work?

One of the friendly members of the debt team will assess your financial position and if an IVA is the best option for you then they will work with you throughout that process.

1. Hamilton Wentworth will introduce you to a leading Insolvency Practitioner (IP) with significant experience and credibility. You must nominate a fully licensed IP and instruct them to act on your behalf.

2. Hamilton Wentworth and your nominated Insolvency Practioner will work alongside you to produce a proposal to put forward to your creditors, subject to their approval.

3. Once you agree with the IVA proposal, we'll send a copy to each creditor who will then vote to either accept or reject the IVA proposal. If the majority (at least 75% of those who vote) vote in favour, then all creditors are legally bound to accept (even those who rejected it!). The creditors may place forward certain modifications, if you do not accept the modifications the IVA will not proceed.

4. Once your IVA is accepted all hassle from your creditors should stop, the IVA supervisor deals with all correspondents and questions they have. All you have to do is pay the agreed monthly amount, and comply with the reasonable requests of your supervisor.

5. Once the IVA is completed you will no longer owe any money to any creditor that was included within the IVA.

The Costs Involved with an IVA

An IVA is a formal legal process governed by provisions set out in the Insolvency Act 1986 and the Insolvency Rules 1986 as amended. This includes the right of your Nominees and Supervisor to draw fees and expenses. Through Hamilton Wentworth, the Insolvency Practitioners you will deal with charge no fees to you directly. The Nominee and Supervisor fees will be negotiated with the IP and the creditors between them. Full details of fees will be set out in your proposals and therefore are agreed as part of those proposals by you before the start of the proceedings. 

Nominee's Fees

A nominee's fee covers the costs of preparing your proposal and all other necessary documents needed to convene a meeting of your creditors, so that your proposal can be considered by your creditors, as well as holding the meeting and reporting on the results thereof. The nominee fee is usually the equivalent of the first five monthly payments into the IVA and this is within industry norms.

Supervisor's Fees

The supervisor fees are in place to cover the on-going management of your IVA. This includes collecting payments and distributing payments to your creditor, agreeing creditor claims, general correspondents with you and others in connection with your IVA, and dealing with all statutory reporting requirements including an annual report to you and your creditors. They are usually based upon a percentage of your contributions; an industry norm is 15%.