IVA Process

After being declared insolvent, there are certain steps you need to take to clear up your debt. Your first step would be to contact a financial expert for professional advice. Your financial expert will review your situation and advise you on the best solution to your financial problems.

If your Insolvency Practitioner (IP) suggests an IVA, there are a few important things you should know. An IVA proposal is a legally binding contract between you and your creditors, and is put forward by an Insolvency Practitioner (IP). In the IVA it is agreed by yourself and your creditors that you make set monthly payments based on your income. After a 60 month period, the remainder of your debt will be written off.

What exactly is the process?

Please bear in mind that the below timeframe is an example, and will change according to your individual situation. Please see this timeframe as a guide only.

Step 1:

You contact your financial advisor, who will review your situation and determine whether an IVA is the right solution for you. Once you and your IP have decided on an IVA, you will be required to fill out the necessary paperwork.

Step 2:

You send through your required documentation, including things like bank statements.

Step 3:

Your IP will set up a meeting where he/she, along with your creditors, will negotiate your IVA proposal based on the information you have sent. This proposal will document the terms of the IVA as well. In this meeting your creditors will vote on either accepting or rejecting your proposal. If 80% or more of the creditors accept your proposal, your IVA is approved. Note that the 80% figure here refers to the percentage of amount owed, not as a percentage of the number of people owed money. In other words, if you owe £100,000 to five creditors, anyone who is owed more than £80,000 can outvote the other four creditors because he or she has 80% of the vote.

Step 4:

You sign the proposal if you have agreed to all the terms. Your IP will then take care of all other administration duties.

Step 5:

Once your IVA has been approved, it is up to you to keep up with your agreed monthly payments as your IVA contract is legally binding.

Step 6:

After you have obediently paid your monthly payments for 60 months, you are now declared debt free. Congratulations!

 

Further Details of the IVA Process

We may apply for an Interim Order to protect you from your creditors' calls and letters during the IVA process. This means that creditors cannot sue you during this period.

We will submit your IVA proposal to your creditors. They will hold a meeting to vote on your proposal. Normally, your Insolvency Practitioner, who will be acting as Chairman, will represent you. There is no guarantee of success, but Insolvency Practitioners would not propose an IVA that isn’t likely to be accepted.

If 75% (in terms of debt value) of the creditors accept the proposal, your IVA will be approved. All your unsecured creditors are bound by the IVA, whether they had voted against it, or hadn’t voted at all.

An IVA can be one of the best ways to sort out serious debt problems.
Please fill in our Quick Enquiry form or call free phone 0800 048 1768 if this sounds like a good option or you would like some more information on how an IVA can help you.