What Is The Process of An IVA?

IVA Process

An IVA (Individual Voluntary Arrangement) was introduced as part of The Insolvency Act 1986 to help debtors come to an arrangement to pay debts over a set period of time as an alternative to bankruptcy.

An IVA is a legally binding agreement made between a debtor and his/her creditors, due to the legality and regulations imposed on Insolvency Practitioners there is a set process each IVA application must follow:

Complete A Review and Budget

You will initially complete a review with a debt advisor (FCA Authorised) to identify an IVA is the right solution for you, this will include completing an income and expenditure to understand really what you can afford

The Income and Expenditure Budget will be based on the money you have left after living costs have been taken into consideration. This includes your household bills such as Rent/Mortgage, Food, Gas and Electric.

The proposed payment in your IVA is designed to help still live a comfortable life while repayments are made to your debts, each year your income and expenditure will be reviewed to ensure any payments are still manageable

Prepare Your Proposal

We will prepare and issue a proposal to your creditors to demonstrate to them how much you can afford to pay towards your debts

Before this proposal is sent to your creditors your Insolvency Practitioner will ask you to gather information, they will need to prepare your proposal, this is the basic information requested to help determine any advice given by way of an IVA (Individual Voluntary Arrangement) is the correct option for you

Typical information/paperwork needed:

  • Payslips
  • Bank Statements
  • Proof of Benefits
  • Photo ID
  • Proof of Address
  • Proof of Rent / Mortgage
  • Proof of Debts / Credit Report
  • Proof of Vehicle Finance
  • Proof of Childcare / Nursery Costs / Child Maintenance
  • Tax Return (Self Employed) – If No Tax Return Cashflow Forecast

Note your qualified debt advisor can help you gather this information and many insolvency practitioners do not require all the information listed above.

Once your IP (Insolvency Practitioner) has this information they will prepare your proposal to be submitted to you for your perusal to make sure the information in your proposal is accurate as this is a legal document which will be sent to your creditors, this process is where the insolvency practitioner gives your creditors notice for your MOC (Meeting of Creditors) normally 14 days.

You will be expected to sign and date your proposal before it is issued to your creditors, generally this is done by e-signature but can also be done via post.

Meeting of Creditors (MOC)

Once your Insolvency Practitioner has submitted your proposal then it is a case of waiting for a meeting date, this is the date the creditors normally agree or reject your IVA proposal

At least 75% in value of the creditors who vote on your IVA must vote in favour in order for it to be approved, IVA Debt UK has a current approval rate of 97% of all proposed IVAs being accepted

There may be a situation where your creditors reject your IVA, in this instance, we will negotiate with your creditors to get your IVA approved. Creditors can reject IVAs for many reasons from asking your Insolvency Practitioner to reduce there fee’s to asking you to contribute more to your IVA or extending the term of your IVA to 6 or 7 years, Any changes are negotiated with you and your creditors to essentially help mediate a realistic outcome for all involved.

Do You Qualify?

Roughly how much unsecured debts do you currently have?

Less Than £6,000
£6,000 - £10,000
£10,000 - £20,000
More Than £20,000

What is your current employment status?

Full-time employment
Part-time employment
Looking for work
Unemployment
Benefits

What country do you live in?

England
Scotland
Wales
Northern Ireland

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See how an IVA could help you with this simple example to consolidate all unsecured debts into one smaller monthly payment and write off unaffordable debt.

** In most cases up to 90% of the debt can be written off with an IVA. The amount written off will depend on your circumstances, levels between 30% and 90% are realistic.

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