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The Process
IVAs can only be
put together by an Insolvency Practitioner (IP) - most advice
companies will be able to put you in contact with one but
always ask about their fees and whether you need to pay
anything up front. The firm you choose will need to ask you a
number of questions about your financial situation in order to
calculate how much you can realistically pay your creditors
each month. They will then multiply this amount by 60 or 72
months. If it seems that over this period you could pay back a
reasonable amount of your total debt, it may be taken that an
IVA is a suitable option for you.
Once proposals for repayment
have been drawn up, an Interim Order is applied for. Whilst
the Interim Order is in place, your creditors cannot take
action against you without asking the Court. A meeting date
will be arranged and full proposals sent to all creditors who
will then have the opportunity to vote on them. If enough of
your creditors (75% in value) agree, the IVA will become
legally binding. You then make agreed payments for a number of
years (usually five or six) and providing you have completed
your Arrangement as agreed and once the final payment is made,
your liabilities to your creditors are discharged in full.
IPs will conduct regular
reviews of your arrangement and try to help you to complete it
successfully.
Many Insolvency Practitioners
will charge you an upfront fee for putting together the
Arrangement. However, others will not. For further information
contact us on 0800 074 6918 or info@insolvencyhelpline.co.uk.
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The
Advantages of an Individual Voluntary
Arrangement
- You may only pay back a percentage of
your debts and be free from making further payments after
completion of the arrangement.
- You only have to make one monthly
payment.
- The Arrangement is legally binding so
that your creditors cannot change their minds once they have
agreed.
- Once the IVA is in place your creditors
cannot bring any other action against you as long as you
maintain your reduced monthly payment.
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The Disadvantages
of an Individual Voluntary Arrangements
- IVAs are only suitable if you have the
means of making your creditors a reasonable offer of
repayment.
- Your creditors have the opportunity to
agree or disagree with the arrangement through a vote.
However, most Insolvency Practitioners will not suggest this
course of action to you unless they think there is a good
chance your creditors will accept.
- If you do not make the payments to the
IVA it is likely that the Arrangement will fail and your
creditors will be able to take other action against you.
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For further information contact us on 0800
074 6918 or info@insolvencyhelpline.co.uk. | 
