With the large audiences in Ireland for UK television – it is possible you may have seen the ads for IVA’s – Individual Voluntary Arrangements. These are for people in trouble with debts.
An IVA is a formal process available in the UK (including Northern Ireland) that is carried out via the county courts and has to be arranged through an Insolvency Practitioner (IP). The IP submits a proposal for an IVA to the court and to the creditors. The proposal must be approved by 75% (by value) of the creditors. Providing it is approved, it is binding on them all. Typically payments are made under the terms of an IVA for 5 years , at the end of that period the person is free of all the debts that the IVA covers. (Even if the full amount was not paid back!)
There is a fee charged by the Insolvency Practitioners for arranging and supervising the IVA. (These fees are usually taken from the repayments and have been known to be as much as £8000 ) It must be a profitable business judging by the amount of companies offering to do it. An IVA stays on the UK credit file for 6 years.
In Ireland there is not an equivalent to the IVA – If your debts get to the stage where you are issued with a summons – the initial summons will give you a number of options, which give you the chance to either admit you owe the money, or to defend the claim because you feel you do not owe all or some of the amount claimed.
The Irish legal system does not provide the chance for you to agree that you owe the money and to ask the court to consider an affordable offer of payments that suit your means. You have to try and do this informally outside of the court process.
Before your debts get to the stage of a court case you should try and contact your creditors to let them know you are in difficulty. Work out a budget and how much you can afford to pay back a month. Reputable lenders will normally be reasonable if they know the circumstances.
If you have come to an agreement with creditors to pay off a certain amount each week or month – make sure you keep up the payments . If a creditor does not accept a reasonable offer of repayment, seek advice from Money Advice and Budgeting Service (MABS) . The MABS web site has plenty of information about debt problems and how to deal with them.