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IVA Explained:

IVA or Individual Voluntary Arrangement is a formal (legal) debt solution or lawful binding arrangements that permit you to pay back all the debts in reasonable monthly payments over a period of five years. It helps you to remain updated with priority payments such as mortgage, living costs without fearing for the legal actions from your creditors.

After deciding to go for IVA, you will have to submit an application letter to licensed IP (Insolvency Practitioner) firm. Next, you have to disclose your monetary situation and attach copies of pay slips, property valuation, creditors’ statements and latest bank statements. Later the company with which you are dealing will contact you to discuss about the situation.

Procedure In Detail:

If the IP firm accepts your IVA application, you will be included in an IVA programme, wherein the company will assign an IP team for you. That IP team then represents you and contacts your creditors to notify them that they are representing you.

Later, the IVA proposal is drafted, which includes every details such as the amount of money that you need to pay. If you have kept your assets as mortgage with creditors, the IP works on to acquire a stay order that will abstain the creditors from auctioning your assets. The IP also prepares Nominees report, which presents a practical and professional opinion whether the prepared IVA presents an authentic offer or not.

After this process, IP team fixes a meeting with your creditors. This meeting is held to cast vote on decision whether to move ahead with the IVA or not. If creditors cannot make it to the meeting, they can send their opinions through fax or mail. If more than 75% of your creditors vote in favour of the IVA, then it implies that your IVA is going to be accepted.

As soon as your IVA is accepted, you can hold all your monthly payments. After this, the creditors cannot contact you over phone or in person. Also, all the interest as well as charges on your debt gets frozen and you can pay the debts in an easy manner as charted out in the IVA, for a period of five years.

However, if you fail to make payments on time it can lead to the termination of IVA, and you may become bankrupt. Moreover, your home is also at risk, if the IVA fails.

Important Notes:

People who wish to apply and benefit from IVA need to possess the following:

1. They need to be bankrupt
2. They need to have insignificant debt
3. They ought to have enough money to make payments,
4. They need to afford making a payment of £ 200 each month for a period of five years
5. Finally, they have to be employed

IVA is different from bankruptcy. You do not have to advertise in newspaper about IVA. However, IVA is a good mode available to you, as you are not only able to pay your debt properly, but it also gives you respite from those constantly harrowing calls of creditors.

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