Frequently Asked Questions
Individual Voluntary Arrangements
How much will I need to pay into my IVA?
The simple answer to this one is that not unsurprisingly your creditors will want you to pay in as much as you can afford. This is not to say that they want all of your income. A calculation needs to be done to establish what your surplus income is. This is calculated by taking off your essential expenditure.
To calculate what is surplus you will need to go through an income and expenditure exercise. This is best done with a professional as whilst you may spend a certain amount on things like haircuts, clothes, holidays, going out etc there are maximums that creditors will accept in most circumstances. Whilst they don't want to kill your lifestyle they also don't want you to have a great lifestyle at their expense.
To give you an idea of how much you will need to pay look at the example below. It is based on a couple as we find most IVAs are undertaken with people who are either married or who have a partner.
| Income | |
|---|---|
| Your take home pay (inc. overtime) | £1,500 |
| Your partner's take home pay | £750 |
| Other income (Benefits, pension, maintenance etc) | £100 |
| Total household income | £2,350 |
| Expenditure | |
|---|---|
| Mortgage/rent | £500 |
| Mortgage endowment | £80 |
| Council tax | £80 |
| Water/Gas/Oil/Electricity/Phone/mobile | £100 |
| Food and other household goods | £300 |
| Car expenses | £100 |
| Car finance | £100 |
| Public transport | £20 |
| Clothing | £100 |
| Cigarettes | £100 |
| Maintenance/CSA payments | £100 |
| TV Licence/rental | £20 |
| Insurances (Home, life, health) | £40 |
| Pension contributions | £40 |
| Other | - |
| Gifts, Christmas, Contingency | £50 |
| Total household expenditure | £1,730 |
| Totals | |
|---|---|
| Income | £2,350 |
| Expenditure | £1,730 |
| Monthly surplus (Income - Expenditure) | £620 |
Now based on this example assuming your debts are only in one name it is likely that an IVA could be organised so you pay £414. This is because your total family surplus is £620 you earn twice as much as your partner therefore you pay two thirds of the family surplus into the Iva and your partner gets to keep all of the rest.
Is an IVA the right answer to my debt problem?
When should I consider an IVA?
How much will I need to pay into my IVA?
Will my creditors accept my offer?
What minimum payments do creditors accept into an IVA?
Will I really be debt free at the end of an IVA?
Will I be able to borrow money during the IVA?
What happens if I get a big pay rise or win the lottery or some other type of windfall?
Will people know about my IVA? Will it go into the local papers? Will my employer know?
How difficult will it be to get credit again?
Will an IVA cost me more than going bankrupt?
My wife or partner has debts but their debt is under control. Will they need to pay into my IVA?
What fees do you charge and how do you get paid?