Here follows a list of the most common questions we’ve been asked. We can’t pretend that this is an exhaustive list, so if your question isn’t answered below, please feel free to contact us.

General Questions – Debt Management

1. What is financial or debt management, and how does it help me?

2. Why will my creditors accept a reduced repayment arrangement?

3. What about my future credit rating?

4. What happens to my credit rating?

5. Are there any debts that I can’t include?

6. Are your services confidential?

7. What if my circumstances change?

IVA Questions

1. Is an IVA right for me?

2. How do I apply for an IVA?

3. What’s the risk to my assets?

4. Will my IVA be made public?

5. How much will I pay each month?

6. What if I don’t pay every month?

7. Will it affect my credit rating?

8. How long will it take to set up my IVA?

9. Will I have to pay fees?

10. Will I lose my house?

11. Can I settle my IVA early?

12. Will the IVA stop my creditors taking action against me?

13. I’ve had a bankruptcy order made against me. Can I still have an IVA?

14. I’m considering an IVA but my creditors are taking me to court. What shall I do?

15. What if one creditor refuses to accept my IVA?

16. Can I cancel the IVA once it’s set up?

17. What happens if all my creditors don’t approve my IVA?

18. Can I use my credit and store cards or take out a loan while I have an IVA?

19. If I have positive equity in my property, how does this affect my IVA application?

20. How many creditors do I need to owe before you’ll accept me for an IVA?

21. What if I have a windfall of money?

22. Can I get a new mortgage when my IVA finishes?

23. Can I arrange an IVA directly with my creditors?

24. Will I have to close my bank account?

1. What is financial or debt management, and how does it help me?

Financial or Debt management enables you to consolidate your credit commitments into one affordable monthly payment. This amount is then paid to the debt management company who in turn distribute the payment between your credit companies.

This allows you to manage essential bills such as your mortgage, rent, council tax and other living costs, more easily.

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2. Why will my creditors accept a reduced repayment arrangement?

We can only help people who are genuinely unable to meet their credit commitments. Through dealing with of hundreds of clients every day, we are in a very strong position to agree reduced payments with your creditors. Creditors are not obliged to reduce payments or to freeze interest; these points are negotiable and should not be viewed as a right. Importantly, we use strict guidelines in how we work out a payment, which is both affordable for you and in line with the creditors’ expectations.

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3. What about my future credit rating?

Your ability to obtain further credit may be affected. However, since the purpose of the programme is to help clear the debt that you are already having problems handling, this must remain the priority. The programme relies heavily on your payments being made consistently. This will help build a payment history that will allow us to recommend you to lenders we use for mortgages, loans etc.

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4. What happens to my credit rating?

Your credit rating may be affected, however, since you are experiencing some problems maintaining payments, your ability to borrow will already be impaired. Significantly, when you have finished, we will ensure you receive a letter to confirm that all your debts are satisfied. The payment history you build with us is a valuable recommendation later.

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5. Are there any debts that I can’t include?

You can normally include any unsecured debts in your management programme. This rules out your mortgage, any loans secured on your home, and hire purchase debt. You can also include tax and VAT debts, which are usually repaid first. In most cases, you can’t include:

Rent
Council Tax Arrears
Fines or penalties for offences
Liabilities for family or domestic court action such as claims for child support
Liabilities made under section one of the Drug Trafficking Act 1986 and section 71 of the Criminal Justice Act 1988
Most educational loans, as they fall outside of the Insolvency Act 1986
Gambling debts

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6. Are your services confidential?

We are licensed under the Data Protection Act and Consumer Credit Act. We appreciate the sensitive, personal nature of the information we hold and pride ourselves in our extensive procedures aimed at safeguarding confidentiality. Text messages may even be used as a discreet form of contacting you rather than burdening you with more paperwork.

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7. What if my circumstances change?

Your payment is sensitive to any changes in your circumstances. You may request a review of your payment amount at any time.

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1. How do I apply for an IVA?

You can apply quickly and easily for an IVA now. From there, we’ll get in touch, discuss your situation and talk through your options.

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2. What’s the risk to my assets?

With an IVA, the risk to your property, savings and investments are less than with a bankruptcy. As you will be offering regular monthly payments, your creditors will not usually claim for equity from your home. However, they may require funds from such sources as savings, endowment policies, premiums bonds and ISAs.

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3. What’s the risk to my assets?
With an IVA, the risk to your property, savings and investments are less than with a bankruptcy. As you will be offering regular monthly payments, your creditors will not usually claim for equity from your home. However, they may require funds from such sources as savings, endowment policies, premiums bonds and ISAs.

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4. Will my IVA be made public?
No. Unlike bankruptcies, IVAs do not appear in the press. However, they are recorded on an IVA register at the Department of Trade and Industry (DTI).

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5. How much will I pay each month?

This depends on your disposable income, not the size of your debt. Your disposable income is your remaining money after you’ve paid reasonable monthly living expenses, excluding your debts. This figure is agreed between you, your insolvency practitioner and your creditors.

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6. What if I don’t pay every month?

You should always try your best to meet your IVA commitments as your creditors may take action against you if you don’t. However, if your circumstances change and you face brief financial difficulties, it’s possible to arrange a break from paying. Any months you miss are normally added to the end of the IVA’s five-year period. If you suffer more severe financial problems, your appointed insolvency practitioner can ask your creditors if they will agree to change the IVA. If, up to this time, you’ve paid without problem, your creditors are more likely to agree to this.

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7. Will it affect my credit rating?

Yes, because taking an IVA means you’ve fallen behind with your debt payments. With an IVA, you can’t apply for further credit without your appointed insolvency practitioner giving you permission.

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8. How long will it take to set up my IVA?

It usually takes around 60 days to set up an IVA, but may change depending on the time it takes you to complete and return the paperwork.

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9. Will I have to pay fees?

Although fees are charged for setting up and supervising the IVA, your monthly payments cover them. In other words, your creditors bear the cost of your IVA.

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10. Will I lose my house?

No. However, if you have equity in your home, your insolvency practitioner will take this into account when offering an IVA to creditors. You may also need to release some of your home’s equity during your IVA’s five-year term.

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11. Can I settle my IVA early?

Yes. Many of our clients end their IVAs early by paying a cash sum. If you wish to do this, we can arrange settlement while ensuring you’re fulfilling your commitments under the IVA.

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12. Will the IVA stop my creditors taking action against me?

Yes, providing you keep paying your agreed monthly sum.

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13. I’ve had a bankruptcy order made against me. Can I still have an IVA?

Yes. It’s possible to cancel a bankruptcy and select an IVA by completing a ‘Fast Track Individual Voluntary Arrangement’ (FTVA) form. By doing this, your agreed payment must pay your creditors more than they would receive under a bankruptcy. If your creditors agree to your proposal, the Official Receiver will run the FTVA for you. As there are fewer set-up fees and costs, an FTVA is also cheaper than a typical IVA.

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14. I’m considering an IVA but my creditors are taking me to court. What shall I do?

When your insolvency practitioner has prepared your proposal, they can apply to the county court for an ‘Interim Order’. This stops your creditors starting bankruptcy proceedings against you. It also prevents other enforcement action without the court’s permission. Better still, your insolvency practitioner can take care of this in around one week.

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15. What if one creditor refuses to accept my IVA?

While individual creditors can vote against your IVA, if 75% of them vote in favour of your proposal, all your creditors must accept it.

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16. Can I cancel the IVA once it’s set up?

As an IVA is a legal process, you cannot cancel it if you change your mind. However, the IVA will fail if you do not comply with its terms. At this time, your creditors could take legal action against you.

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17. What happens if all my creditors don’t approve my IVA?

While individual creditors can vote against your IVA, if 75% of them vote in favour of your proposal, all your creditors must accept it. It is unlikely that 75% will not vote in favour, however, if they do, you would need to agree an informal repayment arrangement with your creditors or declare yourself bankrupt.

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18. Can I use my credit and store cards or take out a loan while I have an IVA?

No, you will not be able to use store or credit cards, or obtain a loan. However, you may be able to change your mortgage or take a new one. In these cases, you must consult with your insolvency practitioner.

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19. If I have positive equity in my property, how does this affect my IVA application?

If you have equity in your property, or any other valuable assets, you may need to release some or all of this within your IVA agreement.

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20. How many creditors do I need to owe before you’ll accept me for an IVA?

At least three. Bear in mind that multiple credit cards or loan agreements from one lender count as one creditor. Many different store cards are also covered by the same lender, so these also count as one creditor.

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21. What if I have a windfall of money?

If you come into money, your IVA will usually include a ‘windfall clause’ that means you must pay the cash into your arrangement. If you receive bonus payments or regular overtime, depending on their value, you may need to pay half the amount towards your IVA.

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22. Can I get a new mortgage when my IVA finishes?

Yes, that should be fine. However, you may find your new mortgage is more expensive. That’s because your lender might take your past financial difficulties into account.

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23. Can I arrange an IVA directly with my creditors?

No. The arrangement is a legally binding contract that requires a ‘nominee’ to handle your repayment proposal, and a ‘supervisor’ to take care of your IVA from there. Your insolvency practitioner will usually perform both roles.

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24. Will I have to close my bank account?

You don’t have to, but it might allow you to make a fresh start before beginning your IVA. It’s also essential to open a new bank account if your current bank holds some of the debts in your IVA. However, you won’t need to close your bank account; simply start a new one.

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