What is an IVA?
An Individual Voluntary Agreement is a form of insolvency, it is however often falsely advertised as a debt repayment or a debt management plan. Taking up IVA is a serious financial step and should be explained to you as such. When signing up for an IVA, you allow a qualified third party to manage your finances for 60 months. If you have an IVA and no-one has explained to you have undertaken a form of insolvency, then you have been mis-sold an IVA.
Fees for IVAs and Trust Deeds
Insolvency practitioners are required to propose an IVA or Trust Deed to your creditors. The fees for managing your case will run into the thousands, with some fees being £7,000 for the 5 years of agreement period. These fees are reviewed and accepted by your creditors, but high insolvency practitioner’s fees means that less money will be returned to your creditors.
If during the course of the IVA or Trust Deed you inherited money and could afford to repay all of your debt, you would also have to pay for insolvency practitioner fees too.
Individual Voluntary Agreements (IVA), or Trust Deed in Scotland, have been increasingly popular over the past few years. It is estimated that almost 50,000 IVA and Trust Deeds are being sold across the UK. Unfortunately, IVAs are suitable for only about 10% of people in debt. An IVA allows a person to make an affordable monthly payment towards their debt for 5 years. The Trust Deed is the Scottish equivalent of the IVA, but the agreement only lasts for 3 years.
Have I been Mis-sold IVA?
As much as 90% of UK citizens who signed up for an IVA could have been misled. Some of the signs you were offered an inappropriate solution to your debt could be the lack of accurate and objective information on Individual Voluntary Agreements; the lack of in-depth and careful financial assessment and evaluation of your current and future financial situation; or not being explained that IVAs are a form of insolvency; or not being presented with alternative options to cover your debt.
IVA assessment
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