IVA.TV What is an IVA – IVA Process
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IVA Process
Firstly it is important to speak to a Qualified IVA Advisor (you can request a Free Call Back from an IVA Company (One Advice) we work in association with by completing the form on the right). They can give detailed IVA Advice and answer any further queries you have.
The IVA (Individual Voluntary Arrangement) Advisor will take details of your income and essential living expenses (i.e. Mortgage/Rent, Utility bills etc) and a list of all your debts i.e. credit cards, loans, store cards, catalogue debts etc. All that will be required initially will be the name of the debt and an estimate of the balance owed. Some background information will be required about how and why the debts were accumulated. Often this can be because of relying on credit to fund living expenses or borrowing from Peter to pay Paul. Also details of any assets you have i.e. car, home, investments, savings, jewellery etc.
From this basic information the advisor will be able to tell whether you may be suitable for an IVA or may recommend other consolidation solutions that may be better for you i.e. if you have significant equity you may be better remortgaging or taking out a secured loan. There are a number of IVA Alternatives that need to be considered before entering into an IVA i.e. debt management, bankruptcy or a Protected Trust Deed (if you live in Scotland).
If an IVA is considered the BEST solution then the advisor may want you to get recent statements or loan agreements to get account numbers and more accurate account balances. If this isn't readily available you can send back the paper work that is to hand when you return a completed Fact Find document.
The IVA Company will then send out a Fact Finder Document summarising the information you have given and requesting additional information i.e. bank and credit card statements, loan agreements, Proof of ID (required for Money Laundering Regulations), Recent Payslips or accounts if self-employed. You can request a face-to-face meeting to go through the form and a representative can visit you at home to collect this information if preferred. The Fact Finder document will be accompanied with additional information on the IVA Process and the Implications of Entering into an IVA.
Once the IVA Company receives your completed paperwork they can make a final assessment of whether an IVA is suitable and viable (it could be that when you originally discussed your IVA you omitted a debt that the Insolvency Practitioner feels could affect your IVA (some creditors if they have a large balance owing always vote against an IVA and if their share is >25% of the total debt they can in effect block your IVA)).
If one of your creditors is your current Bank then it is normal to set-up a new account at a Bank where you do not owe money. We can help you set-up a new Bank account.
An IVA proposal has to be put together by a Qualified and Licensed Insolvency Practitioner which summarises your financial position. Through this the Insolvency Practitioner is able to put a case forward to your creditors (people you owe money to) why you are unable to realistically repay your debts in full.
The Insolvency Practitioner has to show the creditors that they will receive more money back through an IVA than if you went through a bankruptcy (this is why creditors are willing to write-down the remainder of your debt because they are collecting more than if you opted for Bankruptcy which is an option you could pursue).
You will be sent the IVA Proposal before it is issued to your Creditors to confirm and sign that it is a True and Accurate reflection of your position. The proposal is strictly an offer from you to your creditors and if they accept forms a contract between you both that is administered by the Insolvency Practitioner.
The creditors then have to vote to accept or reject the IVA at a Creditors Meeting (normally voting is done by post). 75% of voting creditors (by value) have to accept the proposal.
Once accepted the Court is informed and normally the Insolvency Practitioner is appointed to supervise your IVA. It is then important that you maintain the payments as agreed.
Your IVA Proposal will be advertised in the London Gazette or Northern Ireland (which is a publication used by creditors to ensure they are included where you owe them money). It is not generally read by the General Public so it is unlikely someone you know will read it. It is also available to view online.
An IVA is recorded on an IVA register (The Individual Insolvency register is a Public Record of Bankruptcies and Individual Voluntary Arrangements).
How Long Does an IVA Take to Arrange:
If you act promptly to supply us with information that we ask for (including copies of your most recent statements/loan agreements), we should be able to process your IVA application in 4 to 6 weeks. Complex cases (e.g. where you own your own business) can take longer.
How Long does the IVA Last:
Typically an IVA should last for a 60 month period. If you have equity in your property you will normally be required to release all or part by way of a remortgage or secured loan in the final year of the IVA. We can help with this process at the time.
What if my Circumstances Change During the IVA:
If any of your financial or personal circumstances change within the duration of your IVA then you must contact your Insolvency Practitioner immediately. It is possible to modify your IVA through a Variation meeting to reflect your new financial situation. If the problem is more of a short term nature, emergency payments breaks can be granted. If at any time you cannot afford your contractual payments you must contact your IVA Company immediately.
During your IVA the Insolvency Practitioner will request quarterly payslips as proof that your income is still similar to the original proposal. An annual review is performed to run through your income and expenses to ensure your monthly payment amount is still appropriate. This is an important financial health check and is a useful exercise also for your benefit.
If you miss any payments without the Insolvency Practitioners permission then there is the chance that your creditors can commence bankruptcy proceedings against you.
Successfully completing your IVA is the only way that you can be protected from your creditors.
Can I cancel my IVA?
No, as an IVA is a legal process it means that once it has been set up it cannot be cancelled.
If you come into a lump sum through inheritance etc then you maybe able to do a ‘Full and Final’ IVA where a lump sum is offered in full and final settlement of your debts.
IVA Note:
Entering into an IVA may adversely affect your credit rating for up to six years from the date of approval.
Your property will be protected within an IVA but you may be required to release all or part of any equity during the period of the arrangement.
Failure to complete the term of an IVA can result in bankruptcy.
We can help advise if an IVA may be RIGHT for YOU. Submit your contact details so we can give you a call straight back (form on the right hand side of the page) or for a full application form please click here.
For further IVA Information, please click on the relevant links below:
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