After the initial discussion with your insolvency practitioner, a recommended course of action will be devised. Your Insolvency Practitioner will look at whether a debt management plan or an Individual Voluntary Arrangement is more suitable for you or not. This plan will be sent to you to read and sign, once you have signed and sent a copy back to your insolvency practitioner and give him permission to proceed, he/she will then continue with the proceedings.
Your insolvency practitioner will than draw up a set of proposals. This proposal will include details such as your income and expenditure, details of your creditors, a short history of how the debts built up, and proposal for payment (this proposal includes the amount of money you will be able to pay back every month and the duration you will be paying back for). At this stage the best advice is that you read through all the documentation and ask any further questions.
In special circumstances your insolvency practitioner may need to send a copy of the proposal to your local County Court for approval and request an interim order. This interim order will protect you from any further court action, which includes any bankruptcy proceedings.
The next step is, proposal and an interim order will be sent to your creditors along with the schedules and all other details, date and place where the creditors meeting will be held. Your insolvency practitioner will expect you to attend this meeting so that if there are any points that arise in the meeting could be clarified without further delay among you and your creditors. For an IVA to be approved a 75% vote is needed from the creditors. If the proposal does receive 75% vote and the IVA is approved, it becomes legal binding on all creditors including those who did not vote.
After the meeting takes place a supervisor will be nominated who will look after the IVA. A Chairman's report will be sent out to all the creditors and their agents; this will give them the outcome and any details of the vote. Any modification to the proposal will also be confirmed at this point.
A supervisor will oversee the IVA arrangement throughout the duration. On your part, you would make one monthly payment in an account held in your name; from which payments will be sent to your creditors. Your IVA supervisor will carry out an annual review of your income and expenditures, this report will be sent to you and to your creditors provided that you stick to the payment and the terms of the IVA, and at the end of the arrangement your debts will be written off.
Key points of an individual voluntary arrangement (IVA)
A plan of action, payment methods to the creditors which need to be approved by means of vote by the creditors.
If a voluntary arrangement gets approval, a bankruptcy order can be cancelled.
The public register holds information on the individual voluntary arrangement for two years after the date of either the completion or termination of the arrangement.
For an IVA proposal to be approved if he is at least 75% full from the creditors in the creditors meeting.
if the applicant fails to maintain payment to the creditors, and they can apply for bankruptcy of the individual
What happens next?
Once a decision has been made that an Individual Voluntary Arrangement (IVA) is right for you, you will be asked questions regarding your current financial situation. Based on the information you have given, a repayment amount will be agreed with you. Once proposals have been drawn up you will need to check and sign these and return them to your Insolvency Practitioner (IP).
Applications are usually made at the court for an Interim Order. This stops any creditor from taking legal action against you.
The Individual Voluntary Arrangement (IVA) will be legally binding as long as you keep up the repayments, when the term of your agreement is finished; you will be free from these debts regardless of how much has been paid off.
This arrangement is subject to review. This is to check any change in your circumstances during this period.
It is very important that consumers do not confuse an Individual Voluntary Arrangement (IVA) with a Debt Management Plan, which is not legally binding.
When an Individual Voluntary Arrangement (IVA) is accepted the IP's role becomes that of supervisor, monitoring the Individual Voluntary Arrangement - IVA's progress and ensuring that the terms and conditions that were agreed to at the creditors meeting are properly adhered to.
It is the debtor's responsibility to pay the agreed payments to the IP who will then ensure that these payments are distributed to all creditors on a pro-rata basis in accordance with terms and until the successful completion of the Individual Voluntary Arrangement (IVA). It is in the debtors own interest to maintain their payments as failure to pay will almost certainly result in the failure of the Individual Voluntary Arrangement (IVA).
Why use us to set up your IVA?
If you have debts over £15,000 than our Insolvency Practitioners can help you by proposing an IVA plan for you. Our Practitioners are industry regulated with many years experience in dealing with people like yourselves. We believe in providing honest, professional and reliable service. Fill out our online no obligation enquiry form to arrange a callback from one of our specialist Insolvency Practitioners. They will be happy to listen to you and devise a plan that is best suitable for your situation.
