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What is a simple IVA ?

IVAs were designed as a way for those in business to manage their debt and avoid having to declare bankruptcy. These days they are just as commonly used by anyone with a debt problem though and this is why the idea of a “Simple” IVA is being proposed. The UK government has been consulting on plans to introduce such a system in the coming years. 

What is a Simple IVA?

Due to the increase of those non business people in debt, the government has decided to find a way to simplify the process of obtaining an IVA. The original IVA will remain for those who work in business but there will be a new addition for those outside of the business world. This will be called the Simple IVA also known as SIVA. This will be further simplified by splitting the SIVA into two levels. If your debt is less then £25,000 you will use SIVA 1 and if your debt is between £25,000-£75,000 then you will use SIVA 2. Anything over this will be dealt with using the original IVA.

You may know that when you apply for a standard IVA it is a requirement that your creditors agree a majority vote of 75%. However with SIVA 1 application this is not the case and is accepted provided the proposal is deemed favourable to bankruptcy. With the SIVA 2 level a vote will still be needed but you will only need a 51% majority.

What would be the benefit of a Simple IVA?

The Simple IVA will make the process of obtaining an IVA faster and easier for families looking for access to help. It will hopefully encourage those in debt to deal with their finances since the time required to set one up will be greatly reduced. The hope is that these types of SIVAs will mean that the maximum amount that the person can afford will be made.

As with all financial arrangements it is imperative that you contact a professional to give you help and advice regarding your personal circumstances. Make sure that if you are in debt you seek help immediately so that you can be offered help and reduce the worry and stress.