In An IVA Proposal Do I Include Secured Debts

If you are considering applying for an Individual Voluntary Arrangement you should be clear as to what debts must be included and which debts must be excluded in the arrangement.

The Insolvency Practitioner dealing with your case will confirm for you what debts can be included in your IVA Proposal. Even before you take the step of seeking advice you should be aware that not all of your debts can be addressed in an Individual Voluntary Arrangement. Some of your debts will need to be paid in full on an ongoing basis and you will have to allowances for theses debts when preparing your monthly Income and Expenditure Statement which you need to prepare as part of your IVA proposal.

For a start, all secured debts must be paid outside of the arrangement. The most important secured debt is your mortgage (if you have one) and your car HP (provided it is in fact a proper Hire Purchase Agreement and not just a motor loan) is probably the second most important secured debt.

Nearly all of your unsecured debts must be included in your IVA. This means that you will be offering your creditors a dividend on these debts and therefore not paying them in full. There are however exceptions to this for example fines, student loans and Child Support Agency arrears must be paid in full on an ongoing basis. These debts cannot be lumped in with your other unsecured debts.

So after deducting all of your normal living expenses (which include mortgage or rent, car HP, council tax, water rates, food, drink, clothing, heat and light, travel expenses, costs relating to children and other dependents and so on), you will be left with your disposable income (DI). This remaining amount of disposable income is what you will contribute to your creditors, minus the administration costs of your IVA.

Your Insolvency Practitioner will calculate for you exactly how much you can offer to your creditors in your IVA taking into account all of your income and all reasonable household expenses. It is therefore important that you disclose all of your debts to your Insolvency Practitioner from beginning otherwise you could find that an omitted debt could cause your IVA to fail in the future.

National debt relief can offer you debt advice and iva advice. Contact them today for help and advice.