The process for Individual Voluntary Arrangements
Talk to a Financial Solutions Advisor who will be able to provide you with debt advice. They will be able to discuss how you can take control of your debt and explore the range of debt options available to you, it could be that an IVA is not the best solution for your debt problems. If not they will find an alternative debt solution that will help you get debt financially healthy.
If the provider believes an IVA is the right solution for your debt problems, the Financial Solutions Advisors will discuss your financial situation with discretion. This will be the first stage for you to take control of your debt. They will look at your level of debt, how much you owe and who it is owed to. As an IVA needs to be set up by a licensed professional, they will start proceedings with an appointed Insolvency Practitioner.
Your appointed Insolvency Practitioner will draw up your IVA proposal. Your IVA proposal will inform your creditors how much you can reasonably afford to pay towards your debts. The payments on your proposal will be based on your much you can afford to pay each month once you’ve allowed for your living expenses and secured debts. These will usually be regular contributions over a 60 month (5 year) period.
Your creditors will have to accept an IVA for it to be put in place. A copy of the proposal will be sent to them and they will be invited to vote either FOR or AGAINST it. For the IVA to be accepted the majority of your creditors (more than 75% by value of your debts) will have to vote FOR the proposal.
If the majority of your creditors vote FOR the IVA proposal, your IVA will be approved and will be legally binding for all of your creditors, even those who voted AGAINST the proposal and those who didn’t vote either way.
With the IVA in place, you will simply begin making the payments as agreed in the proposal and will be able to manage your outgoings. As the IVA is legally binding, your creditors will no longer be able to pursue you any further for repayment of your debts.
You could be financially healthy in 5 years. Once you have made all of the agreed payments over the agreed 5 year period, the remainder of your debts will be cleared.
Where equity is available but cannot be released creditors may except additional 12 installments to conclude the plan thus ensuring your equity is retained.
As your provider will only present an IVA to creditors that meets all the relevant criteria the success rate consistently exceeds the 85% acceptance rate, you will also be offered alternative solutions such as debt management plans should an IVA not be appropriate.
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