What is an IVA ?
An IVA or Individual Voluntary Agreement is only available to United Kingdom residents. It is a government-approved means of resolving debt that avoids the consequences of bankruptcy. An Insolvency Practitioner (IP) is the only person that can oversee an IVA. The subsequent information outlines how you go about starting an IVA but first you must decide if need one. Depending on your situation, an IVA is usually a better solution than debt management, which can incur extra costs.
The first element is requirements. You must be a UK resident (excluding Scotland) and you must have over £15,000 in debt owed to three or more creditors. You also must be unable to pay for repayments on those debts to be entitled to apply.
When accepted you could have up to 75% of your debt written off though so an IVA can be rather useful for some people. Your creditors will likely recuperate more of the debt from an IVA than they would if you were to declare bankruptcy so they often find it to be a favourable option.
The only people that can manage an IVA are licensed Insolvency Practitioners. The IP will act in many roles during the IVA procedure. Their jobs, during the 5-year length of the IVA, include:
- Advisor
- Nominee
- Chairman
- Supervisor
STEP 1
The best way to start making decisions about an IVA is to get in touch with us by caling us on 0800 043 5135 or filling out one of our forms and we will call you back. We will then help you decide if you need an IVA.
If you do decide to go with an IVA then we can help you figure out your current financial situation and decide if you are able to apply for an IVA. If it is decided that an IVA is the best decision for your financial problems then one of our Insolvency Practicioners (IP) will be allocated to review your case. Our in house IP's will always be able to give you the most up to date and reliable IVA information.
STEP 2
The next thing is to decide which debts might be included in an IVA. Normally most unsecured debts can be included within an IVA. These include, among others, the following debts:
- Store & Credit cards
- Personal loans
- Education loans
- Overdrafts
- Outstanding debt from vehicle repossession
- Outstanding debt from home repossession
- Business loans for which you are liable
Don’t forget that you must have three or more creditors and owe £15,000 or more to apply for an IVA.
There are some debts that may not be included in an IVA. These include, among other things, the following:
- Secured debts & loans
- Mortgage Arrears
- Vehicle HP
STEP 3
If you are qualified the next step is to meet with the Insolvency Practitioner to draft up a IVA Proposal. The proposition is then taken to a Creditors Meeting with your IP acting in the role of a Chairman for the meeting.
At this meeting, the creditors make a decision on the fate of the proposal before it can be considered legally binding. At the meeting, a voting process will take place where the IVA will be rejected or accepted but more than likely your creditors will have some conditions attached. Sometimes the proposal will go back and forth until both parties are happy.
If an IVA is to be legally binding, there must be in excess of 75% of the financial value of the votes cast in favour of the IVA being accepted by the creditors.
Once there is an approval of the proposal by the creditors at the Creditors meeting, the arrangement becomes legally binding, whether all the creditors voted in favour or not.
