Trust Deed / Individual Voluntary Arrangement Frequently Asked Questions.
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How long will an IVA last? |
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An IVA can last any length of time, but they usually last about 5 years. |
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How long will a Trust Deed last? |
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A Trust Deed can last any length of time, but they usually last about 3 years. |
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No. But should you have equity in your house, savings or other assets then these will be taken into account when making an offer to creditors. |
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Can creditors pull out of a Trust Deed / IVA once it has been agreed? |
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No – once the arrangement has been agreed the creditors are bound by its terms provided you meet your obligations. |
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How much will I need to pay each month? |
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This is determined by you, however it should be as much as you can reasonably afford after you have paid any essential items such as mortgage / rent, food etc. |
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When is the best time to set up a Trust Deed / IVA? |
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In short, as soon as possible. This will highlight to you creditors that you are doing everything possible to tackle your problems and prevent your current debts from getting any larger. |
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Does the Trust Deed / IVA apply to all of my creditors or can I leave some of them out? |
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All of your unsecured creditors should be included. If some of your debts haven’t been included this could be seen as a serious problem and the supervisor may have to fail your arrangement. |
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Which creditors can be included in a Trust Deed / IVA? |
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Creditors you can include are: banks, finance companies, credit, store and charge card companies, customs and excise (VAT), inland revenue. You can’t include your mortgage, hire purchase, fines, or maintenance/child support arrears. |
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Why should I choose a Trust Deed / IVA over a Sequestration / Bankruptcy? |
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You have a higher chance of retaining your family home with a Trust Deed / IVA, and it is a more confidential route, as it is not legally required to be advertised. |
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Will I be able to apply for a mortgage in the future? |
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You will be able to apply for a mortgage providing that you have maintained your contributions and the Trust Deed / IVA has been successfully completed. However, you may find that the interest rate is slightly higher at first due to your poor credit rating. This will improve with time.
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What happens once I finish paying my Trust Deed / IVA? |
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At the end of the process the Insolvency Practitioner will issue you with a “Statement of Completion”, typically within 3 months of the final payment. They will also send a copy of this to the Insolvency Service so that they can amend their records. |
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However, the onus is on you to send a copy of the Statement of Completion to all the credit reference agencies that are in operation at the time of their completion. |
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