• Make the agreed payments – usually a monthly or lump sum payment.
• Let your IVA provider know if your income increases or if you receive any additional income.
• Not take out any new credit without permission, for example, loans.
• Once you enter into an IVA it is important to maintain the proposed payments. The IVA may fail if you do not keep up with the proposed payments. During the first few months of the IVA, your payments into the IVA will be used to pay the Nominee’s fee and the Supervisor’s ongoing fees before any payments are made to your creditors. If the IVA fails, you will remain liable for payment of any outstanding balances to your creditors, depending on the circumstances. Your debts may not have reduced depending on the progress of your IVA.
• IVAs have flexibility, so you may be allowed a small payment break depending on your circumstances due to unexpected expenses arising from sickness or difficulties at work. The Supervisor of your IVA will always request proof of any changes.

Our initial advice is free; however, fees will apply if you decide to enter an IVA. These are not upfront costs; they are paid out of (not on top of) the agreed monthly payment and will be discussed in detail by your IVA specialist before you decide to proceed with the IVA. We will always be completely honest and transparent about the fees charged and what these fees are for.

If an IVA is recommended as a suitable solution for you, and you decide to proceed, Lawson Fox Debt Solutions Limited will conduct a comprehensive review of your financial circumstances. No fee is charged for this service.

There are three fees associated with an IVA, but these are included in your monthly payments. The first fee is the nominee fee, which covers the work involved in setting up your IVA. The second is the supervisor’s fee, which is for managing your IVA throughout its term. The third charge is for disbursements, which include costs such as system fees. These fees are typically standard across all IVA firms and amount to approximately £3,950. However, it’s important to note that you do not pay these fees in addition to your monthly IVA payments; they are already included.

If you receive a windfall during your IVA, for example, an inheritance, this will usually be taken and paid to your creditors. If you find out that you are due some money because of something that happened before the IVA, your creditors might have the right to claim it.

Free and impartial money advice is available from the Money Helper, an organisation set up by the government for people in debt.

If your only income is state benefits, think very carefully about the solutions available to deal with your debts. An IVA may not be a suitable solution.

An IVA has to be set up by a qualified Insolvency Practitioner (IP). 

• The IP sends the IVA proposal to your creditors and arranges a formal meeting called a ‘creditors meeting’.
• At the meeting, the creditors can reject your IVA proposal, accept it or accept it with modifications or not vote.
• The proposal has to be accepted by at least 75% ‘by value’ of the voting creditors for it to become legally binding on all your creditors. ‘By value’ means voting creditors who hold at least 75% of your total debt, not the number of creditors you have.
• If the creditors that are owed the highest amount vote against the proposal, the IVA may not go through.
• Sometimes creditors will ‘haggle’ about the terms of the IVA and ask you to agree to pay more every month or include assets you do not want to lose. They may ask you to make payments over a longer period. However, your agreement is needed before these changes are made.
• If the IVA is agreed upon, your IP will supervise the arrangements and check that you are making the payments.

If the IVA does not go through, you are back to the same position you were in before you made the application.

You will have to consider your remaining options.

Understanding how an IVA will affect your home is important before you sign any agreement.

If you are a homeowner, your IP normally wants to include a special section within your IVA proposal called an ‘equity clause’.

This means that during the IVA (normally in year five), you would be expected to apply for a secured loan or re-mortgage to repay some of the debt. If you cannot do this, your IP may propose your IVA over six years instead of five years.

If your circumstances change, you must tell your Insolvency Practitioner (IP). If you are unable to keep up with your payments, your IP may allow you to take a payment break, or they may ask your creditors to ‘vary’ the IVA to allow you to make reduced payments. The IP may charge you a fee for requesting a variation to your IVA.

If you cannot make any payments or your creditors refuse to accept lower payments, your IVA may fail. 

There may be alternative solutions for you to deal with your debts. For example, you may wish to consider a debt management plan. This informal arrangement involves paying your surplus income to a debt management company. The debt management company then negotiates reduced repayments with your creditors.

Bankruptcy could also be suitable for you. Bankruptcy is an official order which ends liability for most debts. However, it can involve selling some of your assets to raise money to pay your creditors.

A debt relief order (DRO) is a bankruptcy alternative which can see liability for debts written off after 12 months. You may be eligible for a DRO if you have debt of £30,000 or less and spare income of £75 a month or less after essential living costs.

There are advantages and disadvantages to each solution. It is important to consider these carefully before deciding which option is best for you.