An Individual Voluntary Arrangement (IVA) is a formal agreement to repay all or a portion of the debt. After repayments are negotiated with creditors, the debtor issues regular payments to an authorized debt specialist referred to as an insolvency practitioner or IP. The IP allocates money from each payment to creditors according to the terms of the IVA. An authorized debt specialist must set up an IVA and there are several costs involved.
If you are in an IVA or entering an IVA and you or your partner are pregnant you can still apply for an IVA or have your IVA payments reduced by 15%. If pregnancy is affecting your income you may be able to apply for a payment break or a variation of your IVA payments. An Annual review is also done in an IVA to ensure your payments are affordable and for the benefit of the creditors. Contact us today to see if you qualify for an IVA.
The IP helps the debtor determine affordable repayments and contacts creditors to obtain their agreement.
Creditors may offer to freeze interest and other charges under an IVA. The IP may obtain a court order that prevents creditors from taking further action while the IVA is established. Once the IVA is in place, creditors may not take any action and an IVA ends once the agreed amount is repaid.
There is no minimum or maximum debt level required with an IVA. In addition, there is no minimum or maximum repayment level required. The fees involved cover the IP charge for negotiating with creditors and managing the IVA. This may include an IVA setup fee and an additional fee with each monthly payment. Citizens Advice Bureau and the National Debtline can provide additional information regarding IVA fees and requirements.
An IVA can run for several years, during which time the personal situation and financial status of the debtor may change
The debtor provides information regarding income, assets, expenses, and debts during the establishment phase. If the financial situation changes for the worse due to an event like the loss of employment, the IP should be informed. The IP may be able to negotiate reduced monthly repayments with creditors.
If the debtor or a partner gets pregnant while an IVA is in place, an additional complication is added. According to recent figures, the cost of raising a child through age 21 can be as much as £200,000. It can be difficult for a pregnant woman to make IVA payments throughout her pregnancy and even more difficult after childbirth when additional related expenses are incurred. Income may decrease when the expectant mother stops working and may increase upon returning to work or when the new mother becomes entitled to new or increased tax credits.
An IVA is not destined to fail during pregnancy but it will also not go away
The IVA supervisor should be informed of the pregnancy of the debtor as soon as possible. If the debtor has a pregnant partner and the situation will affect the finances of the debtor, this situation should also be brought to the attention of the IVA supervisor.
The supervisor of the IVA may authorize a temporary vacation from making payments, reduce payments, or make other arrangements that vary the IVA terms. However, the debt will not be wiped out upon the pregnancy of the debtor or a partner. The IVA supervisor will make it as financially comfortable as possible for the individual to continue with the IVA during pregnancy and after the baby is born.