IVA is available for England | Northern Ireland and Wales
Trust deeds, Individual voluntary arrangements are available to anyone living in England, Northern Ireland and Wales but not to our friends over the Scottish border. However, trust deeds are a very similar procedure which can help people out in the same way as an IVA. The criteria are nearly the same, although trust deeds are slightly more favorable in that the level of unsecured debt required is only
£5000 rather than £7000 and the terms of the arrangements are only 4 years rather than 5. Due to the lower threshold of debt people with only one creditor may be eligible for trust deeds whereas for an IVA you need to owe money to at least two creditors. In both circumstances, the debts must be unsecured.
Other than the differences mentioned above trust deeds and IVA’s are arranged and managed in an identical way. An advisor will conduct an affordability assessment with a client who has been
struggling to meet their contractual repayments of unsecured debts. The advisor will then work out a sum that the client can afford to pay each month towards all of their creditors. A meeting with the creditors is then arranged and an agreement is made by the creditors to accept lower monthly figure while freezing any interest and charges.
The insolvency practitioner will collect one agreed monthly payment from the client and make the contractual payments to the creditors over a period of approximately 4 years. Once this period has concluded the trust deed is finalized and any outstanding debt will be written off and no further request for payment will be made. Speak to your advisor or insolvency practitioner about any fees charged by them and the effect that trust deeds can have on your credit rating.
To summarise, if you do live North of the border you aren’t eligible to enter into an IVA but may qualify for trust deeds which are a similar method of lifting the financial burden you may be finding yourself under. Many creditors in Scotland, as well as those south of the border, are eager to enter into trust deed or IVA agreements with their customers who are having difficulty meeting repayment to negate the need to consider more drastic solutions such as sequestration or bankruptcy.
Contact us today and a friendly advisor will advise you if you qualify for trust deeds, the benefits of doing so and any subsequent implications this may have on your credit file once the 4 year period has ended and your debts have been cleared.