IVA Process
IVA debt can be arranged by many different IVA companies within the UK. Getting to a point with your finances were an IVA debt product is necessary when your own personnel circumstances change because redundancy, drop in salary or if your self employed work slows down and you begin to struggle managing your debt. IVA debt is one step away from bankruptcy and is becoming a better option for a lot of people. IVA debt can help your credit file from getting any worse and over time will help you repair your credit. IVA’s should never be taken lightly and most companies will run through the complete process for you and should never put you under pressure to take out and IVA debt plan/ product. IVA debt help can help you not only mange your finances over a fixed period of time, normally 5 years, but can also help you and your family from the added pressure of trying to manage your debt and your home life.
Once you have decided an IVA debt route is the option you would like to go down you will need to contact the company you would like to use and go through the application with them. To set up the IVA debt product they will normally ask you for your name address details, income and expenditure, number of creditors and the amounts you owe. At this stage it is important that you are completely honest with the IVA company and give them all the details of your creditors so they can put them in to your IVA debt plan and you can begin taking control of your debt.
Once you have decided that an IVA is right for you, the process will go like this:
- Step 1: You will first review your entire financial situation with a debt advisor from the IVA company that is representing you. The debt advisor will work out how much you are able to offer your creditors and whether the IVA is likely to be accepted. If the debt advisor agrees that the IVA is right for you then they will draft up a statement of affairs to be passed to the Company Insolvency Practioner (IP) that will represent your case to the creditors.
- Step 2: The IP will then draft a formal written proposal for your creditors. This will normally detail all of your debts and the background to them. You will have to agree and sign this document as being the very best offer that you can make to your creditors. Your signature will have to be witnessed by a solicitor or a commissioner for oaths. The Insolvency Practioner should also explain other options at this point such as bankruptcy (to make sure that the IVA is the right solution and that you have considered all alternatives).
- Step 3: Your creditors will be circulated with your proposal. They may accept it without modification or request a modification to be made. If a modification is requested then your IP will contact you with the new details (typically it will involve an increase in your monthly contributions to the IVA).
- Step 4: A creditors meeting is held. This is an opportunity for the creditors to discuss your proposal. Your creditors may not attend the meeting but will offer their acceptance of the proposal in writing. At the meeting as long as 75% of the value of the creditors who have responded to the proposal either in writing or person accept, then the proposal becomes legally binding on all creditors.
- Step 5: The court and all creditors are formally informed of the result of the meeting and the IP is normally appointed as the supervisor of the Arrangement. S/he will monitor the monthly contributions, supervise the disposal of any assets and fulfill any other requirements of the creditors.
- Step 6: Maintain your monthly payments into the IVA for the length of time agreed (normally 5 years).
- Step 7: Once these and any other terms of your arrangement have been fulfilled, you will be free from your debts, and any outstanding balance will be written off.
