IVA - How much will I be paying each month ?

The creditors will expect you to pay as much as you can afford to pay, while still allowing for your reasonable domestic expenses.  They don't want every last penny, they want the arrangement to work just as much as you do.

You will need to prepare an income and expenditure budget showing how much income your household will receive altogether and how much it will need for domestic expenditure (ignoring any current payments to creditors).  I send potential new clients a budget spreadsheet allowing them to enter and alter figures to see easily what is left over each month.  For those who do not have Microsoft Excel, a free, simple spreadsheet program is available at Free Spreadsheet Software for Windows.

Your household budget might look like this:     

	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	300
	Car expenses	100
	Car finance	100
	Public transport	20
	Clothing	100
	Smoking	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
	Net surplus of income over expenditure		620

The above is only an example and the categories are not exhaustive.  In the above example, you could reasonably propose to pay £400 per month into the IVA on the basis that as there is a surplus of £620 per month and you earn twice as much as your partner, you can propose to pay £400 to the arrangement while your partner would keep £220 per month for family treats, holidays etc.

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IVA Questions and answers.

I have serious debt problems. What are the options ?

How do I know whether an Individual Voluntary Arrangement (IVA) is the best answer to my problems ?

How do I work out how much I can afford to pay per month ?

OK I'm considering an IVA . How does it work ?

Do I have to attend meetings, or can this all be done by correspondence ?

What do creditors expect from it and how likely is it they'll accept it ?

Are all of them forced to accept the majority decision ? I've got one hell bent on making me bankrupt.

What happens if they don't like the deal ?

If the IVA is rejected, do I owe you anything ?

I've buried my head in the sand, now I've got a bankruptcy petition hearing next week. Is there something that can be done at this late stage ?

Will it really write off all of my debts ?

Will I live in poverty for the duration of the IVA ?

What if I win the lottery or get a big pay rise ?

Will it appear in the newspapers ? Will people know about it ? Will I ever be able to get credit again ?

Is an IVA more expensive than just going bankrupt ?

What will happen to my house, furniture, car and domestic effects ?

I run a business. What will happen to my business ?

I'm a professionally qualified person. Will I lose my livelihood ?

My partner has no debts, and I'm living with him/her. Will he/she have to contribute to the IVA ?

My partner and I have joint debts. Can we lump them all together in the same IVA ?

How do you get paid ? What does this all cost ?

There are plenty of Insolvency Practitioners or debt advice companies around. Why should I instruct you ?

What happens if I'm unable to keep up with the payments ?

What happens at the end of the arrangement ?

What other web sites do you suggest I look at for bankruptcy/IVA advice ?

Please note that this site deals only with personal insolvency law in England, Wales and Northern Ireland. By law, only a Licensed Insolvency Practitioner can undertake an IVA for you. If you need an Insolvency Practitioner in Scotland, visit The Institute of Chartered Accountants of Scotland.

Copyright © Philip Beck Insolvency Practitioner, Cambridge UK, 2005. Bankruptcy and individual voluntary arrangements explained. Free IVA Advice. How to avoid bankruptcy with an Individual Voluntary Arrangement. Debt, debt advice, debt management, debt consolidation.

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