How An IVA Works
Here are the steps to help you discover if an IVA can help you and how an IVA works.
Decide whether an IVA is right for you.
To help you decide, please visit:
Next Step: Speak to a professional advisor
Call us or request a callback for to speak to an expert debt advisor. They will ask you a few basic questions about your current financial sitation. Once they have a better idea about your finances and outgoings, they will be able to discuss with you the options available to you and if you qualify for an IVA based on your individual circumstances.
Once you have decided that you want to do an IVA
Once you have decided that an Individual Voluntary Arrangement (IVA) sounds right for you, an advisor will ask you questions about your financial position. This allows them to understand how much money you need to live on and how much is left over for the monthly IVA payments. The monthly figure that you can afford to pay into the IVA will form the repayment proposal that, with your approval, will be offered to your creditors in the IVA proposal. You don’t need to worry about the technicalities of drawing up an IVA proposal yourself, that is what an Insolvency Practitioner must do by law on your behalf. Once the IVA proposal has been drawn up, you will be asked to check and approve it. Once you have, your creditors will be contacted with your consent.
A meeting is then held with your creditors, again something that will be done on your behalf. This meeting allows your creditors to take a vote on the IVA proposal that has been submitted, usually within a few weeks after the IVA proposal has been sent to them.
You may be contacted by telephone to clarify any details of the IVA proposal but you certainly needn’t worry about attending the meeting itself.
So long as at least 75% of the debt is owed to those creditors that agree to the IVA, the IVA can go ahead. This means that all the debt in the proposal will go into the IVA, even if some of the creditors did not vote in favour of it. In other words, the IVA still goes ahead.
When the IVA has been approved
After the IVA has been approved you will receive a report which will state that the IVA has been approved and can go ahead and will also detail any changes to the proposal that you may have agreed to.
An Insolvency Practitioner (IP) is always responsible for overseeing an IVA.
Each month you will make just one monthly payment into a specific account set up for your IVA payments.
Changes in financial circumstances during IVA
If your circumstances change, e.g. if your income changes and you need to change your payments, then this information will be given to your creditors.
IVAs and credit rating
Very similar to defaults and CCJs on your credit file, your credit rating is likely to be affected for up to 6 years after the IVA has been approved. However, if you already have a lot of debt in your name, regardless of defaults and CCJS, it is quite likely that you would not be able to obtain credit anyway, regardless of whether or not you entered an IVA.
When the IVA has finished, all remaining unsecured debt will be written off leaving you debt free!