Standard Term Proposal
This is the most common of IVA proposals and suitable for people who have a sustainable repayment from their income each month to offer creditors. These are usually proposed over a period of 60 months and set out an affordable monthly payment to your debt, which is agreed with you using recognised guidelines for essential living expenses as well as accounting for all of your household bills before any offer of payment is reached.
It is possible to propose cases under 60 months if you foresee a significant change in circumstances within the next 5 years, that would make you unable to maintain a payment to creditors. (For example: you are due to retire from work and anticipate a significant reduction in your income as you lose your salary and receive state pension). These proposals are more unusual and reviewed on a case by case basis.
One Off Settlement Proposal
These proposals are suitable for people that have very little to offer creditors from their income after all essential living costs are accounted for and would find it difficult therefore, to maintain monthly payments for any length of time but have a lump sum to offer their creditors from savings, sale of an asset or even a gift from a relative or friend. The amount that would be acceptable to creditors is dependent on your individual circumstances and would need to be considered on a case by case basis. But essentially, if it is the best you can offer and results in a fair return to creditors compared with alternatives it is likely to be accepted.
Important Information
Subject to eligibility and acceptance. Fees Payable. Debt write off applies to unsecured debts only and on successful completion of an IVA. If your IVA fails, it could lead to Bankruptcy, although this is rare and alternatives may be available. Your ability to obtain credit will be affected for the medium to long term. Homeowners may be required to release equity in their property, subject to certain criteria. If unable to release equity and equity is available an additional 12 months payments may be requested in compensation.
Financial Support Systems provides insolvency solutions to individuals, specialising in IVAs. We do not administer or provide advice relating to debt management products, such as Debt Management Plans. Advice and information on alternative options will be provided following an initial fact find where the individual(s) concerned meets the criteria for an IVA and wishes to pursue it further, as governed by our Insolvency Practitioners' regulators, the Institute of Chartered Accountants in England and Wales. All advice given on any alternative options is therefore provided in reasonable contemplation of an insolvency appointment.
The Money Advice Service is a free service set up by the Government to help people make the most of their money. If you would like to learn more click here.
The Association of Business Recovery Professional, known as R3, produce a booklet called "Dealing with money worries - A guide to your options". This is a very helpful summary of the various options for dealing with debt and a copy can be found at the following link. Please also see link to 'Voluntary Arrangements - A Guide for Creditors on Insolvency Practitioner Fees'.