DEBT MANAGEMENT

IVA (Individual Voluntary Arrangements)

If you have enough money left over after paying your priority creditors and essential expenses, it may be possible to arrange an Individual Voluntary Arrangement (IVA).

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Information - Debt Management

Make a list of all your creditors, work out which ones to deal with first. Deal with some debts first before others because the consequences of not paying these can be more serious than for other debts.

Deal first with what are called 'priority debts'. After your priority debts you deal with 'non-priority debts'.

Priority debts

Priority debts include:

• Mortgage or rent arrears. You could lose your home if these are not paid
• Fuel arrears. You can have your fuel supply disconnected
• Council tax arrears. A court can use bailiffs to take your goods. Aafter this if you still have arrears unpaid, you can be sent to prison
• Court fines such as magistrates' court fines for traffic offences. The court can use bailiffs to take your goods. After this if you still have arrears unpaid, you can be sent to prison.
• Arrears of maintenance payable to an ex-partner or children. This includes Child Support you owe to the Child Support Agency. A court can use bailiffs to take your goods. After this if you still have arrears unpaid, you can be sent to prison
• Income tax or VAT arrears. You can be sent to prison for non-payment of income tax or VAT.

Non-priority debts

Non-priority debts include:

• Benefits overpayments
• Credit debts i.e.overdrafts, loans, hire purchase, credit card accounts and catalogues
• Student loans
• Money borrowed from friends or family
• Parking penalties issued by local authorities.

You cannot be sent to prison for not non-payment of non-priority debts. But if you don't make any offers to pay, without explaining why, your creditors may take you to court. If you still fail to pay when the court has ordered it, your creditors can take further action. i.e. another court order can be obtained which allows them to send bailiffs round to take your property away. This will be sold to cover your debts.