Has your debt reached an unmanageable level, with creditors chasing you for payment? It could be time to seek the help of an insolvency practitioner who’ll be able to review the situation and assist with consolidating your debts.
Individual Voluntary Arrangement explained
An Individual Voluntary Arrangement (IVA) is a formal agreement between your creditors and you, which states how your debts are to be repaid. These arrangements are conducted by an insolvency practitioner (IP).
Where do you start?
The first job is to find firm that can provide you with an IP, who’ll advise you on the process of an IVA and what to expect. It’s vital to be utterly transparent and truthful with your IP from the outset. Once your IP has reviewed the situation they’ll draft a report for your creditors, which details your financial situation. It outlines your assets and liabilities, the reason why you’re in the situation, and the proposal of repayment for the creditors.
Creditors’ right to vote
Once in receipt of the report, your creditors will review it and confirm or reject the proposal via casting a vote. In order for the arrangement to be passed there must be an agreement of at least 75% of your creditors. The vote takes place at the Meeting of the Creditors, however, the vote can be done by proxy and cast by the chairperson on a creditor’s behalf.
The creditors have the right to make modifications to your IVA, for example an extension of the timeframe or appointing a new IP.
Payments to your IP
Once the proposal is passed, you’ll need to make the payments to your IP as set out in the agreement, and the dividend will be paid to your creditors. If at any time you fail to fulfil your obligations, the IVA can be cancelled and you run the risk of being made bankrupt.
The IVA will be registered on the Insolvency Register and remain there until 3 months after the IVA has been discharged.