IVA Procedure

Total Unsecured Debt

Under £15000 Over £15000

Number of Creditors

Monthly Income

Are you a Home Owner

Yes No

We've already outlined our IVA advice, as well as an overview of how one can proceed. Here we discuss the procedure for an IVA in more detail to help give a better understanding of what's involved.

Your Proposal

After assessing your circumstances and collating the necessary documentation, your Insolvency Practitioner will prepare an IVA proposal and send it to your creditors calling them to a meeting. By law, they must be given at least 14 days notice to attend the meeting. It's important that you check to ensure that you provide details of all your creditors to the IP, because if they haven't been notified of it they are not bound by the terms of the IVA and can later take out separate proceedings against you to recover their debts.

However, in the majority of cases this is not required. Once an interim order has been established your creditors cannot pursue any bankruptcy proceedings against you or initiate any new ones.

The Creditors' Meeting will take place not less than 2 weeks, but usually no longer than 4 weeks after the IVA proposal has been drawn up and sent out.

After considering your IVA proposal the creditors will vote on it. For the creditors to agree on an IVA, over 75% of them "by value" who vote at the meeting must agree to its terms. "By value", means that the votes are not based on a simple head count, but are weighed by the amount you owe to each creditor. For example, if you owe 80% of your debt to a single creditor then they would have the casting vote on your IVA proposal regardless of the number of other creditors.

Creditors Vote on the IVA Proposal

If the IVA proposal is accepted, all creditors are bound by law to accept it regardless of whether they approved it or not, and they cannot take any further action against you if you stick to the terms of the IVA. If a new creditor appears after the IVA has started, they can demand the amount they would have received had they been included at the beginning of the IVA.

Once your proposal is accepted, your creditors will usually ask your Insolvency Practitioner to supervise the IVA, and you will make a single monthly payment into a fund that he or she will manage.

It's vital that you keep up with the payments, otherwise the IVA could be failed and you could be made bankrupt.

It is very important that you inform your Insolvency Practitioner of any changes in your circumstances.

After the duration of the Individual Voluntary Arrangement, any outstanding debts will be written off, your creditors will be unable to pursue any further action against you.

To find out more about how an IVA can help you solve your debt problems, call us anytime 24 hours 7 days on 08000 434 336, or use our online application form.