Frequently asked questions
If you'd like to read more about debt solutions then choose
a link below, but please contact us after that. We'll explain
how our services can help you and you won't be under any obligation:
Debts Manager never resorts to high pressure sales.
You can also read more about different types of solution
in our "What we do" section.
IVAs
1. What is an Individual Voluntary Arrangement
(IVA)?
An
IVA is an Individual Voluntary Arrangement. It is a
legally binding contract between you and the people
that you owe money to, your creditors. It is governed
by the Insolvency Act 1986 and this normally lasts for
60 months. During this time you pay a fixed amount per
month that is then divided up evenly and paid to your
creditors. The total money you pay will be less than
you owe and can be up to 60% off your original debt.
2.
How
much will I have to pay if I enter into an IVA?
This
will depend upon your income, expenditure and personal
circumstances. We treat every case individually.
However, you will only pay what you can realistically
afford and not what the creditors are asking for. This
fixed amount is then paid each month by standing
order.
3.
What
debts will be covered by my IVA?
All
unsecured debt such as: loans, credit cards, trading
debt like Self Assessment or Tax, council tax,
utilities, store cards, catalogues and Inland Revenue
Liabilities.
4.
I
have CCJ’s, can you help?
Yes,
make sure we are informed at your initial interview.
5.
Do
I have to be employed?
No,
but you do need a source of income or benefits that is
more than you need for living expenses.
6.
Will
my employer know?
No.
we offers a complete guarantee of confidentiality and
privacy in relation to your financial affairs. We will
never disclose any information about you to any
outside organisation and will never say who we are
when we call you. This means that you can feel safe in
providing your contact information, without worrying
that others will find out that you are seeking our
help.
7.
How
does an IVA affect my credit rating?
We
negotiate a reduction in your monthly payments which
means you are no longer making repayments at the
agreed original amount; therefore your credit rating
will be adversely affected. Keep in mind your credit
rating may already be affected if you have arrears or
a history of missed or late payments.
8. What sorts of people enter into IVAs?
Simply people who cannot pay their debt. If you cannot
pay your debt as they fall due, you are insolvent and
the law gives you two alternatives - bankruptcy or an
IVA.
9. Are there any other options ?
You could get all of your creditors to reschedule your
debt, but this may be difficult if you have a lot of
creditors. Some banks and building societies have debt
counsellors, and you could try speaking to them. Bear
in mind that unlike an IVA, an informal arrangement
offers no guarantees. One or more of your creditors
could change their mind at a later date, or charge you
higher rates of interest later if your circumstances
improve. You may also take longer to finally clear your
debt.
10. What are the advantages of an IVA?
- We help you to calculate what you can afford, and you make just one payment
to your client account by standing order each month. The payment amount is
the same over the whole period of the IVA unless your circumstances change
and you can afford more. Typically, your circumstances will be reviewed annually.
- Once your IVA is approved, all of your creditors are legally bound by its
terms, as long as you keep paying your agreed monthly sum.
- Once the agreed term of your IVA is over (usually after 5 years) you have
no further obligations to your creditors. At this point you stop paying the
monthly sum, and can start afresh.
- Your employment will probably not be affected. In fact, your employers will
not know about your IVA unless you choose to tell them.
- Unlike bankruptcy, an IVA is not advertised in the local press and does not
exclude you from running a business or lead to many professions terminating
your employment.
11. What else should I know?
You might actually pay more out in an IVA than you would if
you were made bankrupt. This is because bankruptcy income
contributions usually only last for 3 years, whereas contributions
in most IVAs last for 5 years. This voluntary increase in
the total payment should make your creditors sympathetic to
your proposal.
12. Will my home be safe?
You will not usually have to sell your property when in an
IVA. If you do own your home, you need to take reasonable
steps at the end of the IVA to make any equity available to
your creditors (usually by re-mortgaging). This requirement
is also true for bankruptcy, except that bankruptcy often
means you do have to sell your home.
13. What if my creditors don't agree?
At least 75% of votes (in value) at your creditor meeting
must be in favour of your IVA proposal. Creditors can suggest
modifications to your proposal and you can choose whether
to accept them or not.
If your creditors don't vote in favour you will still have
the option of an informal arrangement with your creditors,
or of bankruptcy.
14.
How
much will this cost me?
It
costs you absolutely nothing. The IVA we help propose between
you and your creditors is structured in such a way that it
includes a fee for our work. You will never receive a bill
from us.
15.
What
do I do now?
Initially
fill out the online form, this
is kept to a minimum, and does not ask you for any account
details, this gives us an indication of whether an IVA is
right for you. Your circumstances will then be reviewed and if
you initially qualify for an IVA, we will post you the
relevant forms. All you need to do is simply complete the
“Statement of Affairs”. By doing so you are asking us to
review your current circumstances and advise whether an IVA is
indeed the most appropriate solution to your problems.
Once
we receive your Statement we will either confirm an IVA as
appropriate or offer alternative options. If an IVA is deemed
appropriate, and you still wish to pursue this option, we
provide you with an opportunity to ask one of our specialists
any further questions you may have. We will then produce your
“Proposal to Creditors” which explains in detail the
circumstances of your current problems and your proposals to
repay what you can reasonably afford. The Proposal is sent to
you for review if you’re happy with everything you sign the
Proposal and we commence formal negotiations with all your
creditors to put the IVA in place.
At
no time throughout this whole process (usually 6-8 weeks) do
you pay any monies over to us.
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Bankruptcy
11. What is Bankruptcy?
Bankruptcy is a legal process that allows you to
free yourself from overwhelming debt and make a fresh start
by selling your assets and using the funds raised to pay your
creditors. After your bankruptcy ends your creditors can make
no further claims against you. However, bankruptcy brings
with it certain restrictions such as your situation being
advertised in the local press, having your landlord informed,
and in certain professions a risk of losing your job.
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Mortgages and loans
12. Is a secured loan or remortgage right for
me?
This is down to individual choice, mortgage rates are
usually lower and set up fees higher than those of loans
because of the length of time involved and your home
will be at risk in both cases if you cannot meet the
repayments, we do not offer any loans, as we do not
see this as a way out of debt, just a way of prolonging
it, and paying much more in the long run. We believe in
clearing and ending your debt, whenever possible.
13. Will a consolidation loan help me?
If you can consolidate all of your existing
debt into a loan that offers lower total repayments
then a consolidation loan might be the best solution. This might not be possible in some cases
as many people who are experiencing serious financial
difficulties tend to have poor credit ratings; if this
is the case then taking on more financial responsibility
is likely to make your situation worse.
14. Can I remortgage if I have a fixed / discounted
mortgage?
Yes, but you will normally have to pay an early
settlement charge to your lender. If your settlement
charge is high it might be best to opt for a secured
loan.
15. How long does the process take?
Remortgages normally take approximately 6 weeks and
secured loans approximately 3 weeks.
16. Are there any up front fees?
Not on Secured loans. A remortgage application fee will cover
the cost of valuation, mortgage reference and administration
costs.
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Regulation
17. Who are you regulated by?
Our insolvency practitioners are regulated by either the Institute
of Chartered Accountants in England and Wales (ICAEW), the
Insolvency Practitioners Association (IPA) or the Secretary
of State for trade and industry. We are monitored by either
the Joint Insolvency Monitoring Unit (JIMU) which undertakes
monitoring operations on behalf of the ICAEW and the IPA or
by the Insolvency Practitioner Unit (IPU) within the department
of trade and industry which undertakes monitoring on behalf
of the Secretary of State.
JIMU and IPU monitor compliance by insolvency practitioners
with the insolvency legislation and best practice guidance
and assist in attaining high standards within the profession.
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