A Person Voluntary Agreement (IVA) is a rather new procedure offering a far more personal option to bankruptcy. You will find several advantages of the IVA compared to the traditional insolvency, and that’s why it has become a very popular option for many households. Simultaneously, for those in debt, the precise implications of the IVA continues to be unclear and shrouded in complicated legal terminology. Don’t allow the first hurdle to scare you off. An IVA procedure is actually a very structured process, created to make success the likeliest outcome.
The first step: Getting approved for an IVA
Even before you start considering an IVA, you have to check whether you entitled to the IVA criteria as dictated through the Insolvency Act. To qualify for an IVA amongst others criteria, you have to owe more than £12,000. You should also maintain a reliable job to be able to prove to creditors, that you’ll really have the ability to meet the agreements from the IVA.
Second step: Drafting a proposal
The primary advantage of an IVA consists in the increased versatility in comparison to some traditional personal bankruptcy procedures: You’ll have the ability to safeguard a number of your assets including, for instance, your home, from being obtained from you. When setting up a personalised repayment plan you can include assets not normally obtainable in personal bankruptcy. These for example could be 3rd party funds or earnings out of your ongoing trading or employment. Once you have made the decision on a realistic goal, you will have to present it to your creditors for his or her approval. Drafting this formal proposal could theoretically be carried out by you, but with regards to the many technical details involved in the process, in some instances, it is certainly better to get in touch with an expert debt management company having a specialised IVA department.
Third step: Assigning the licensed insolvency specialist and decision-taking on the IVA
Included in the proposal, you will have to assign an authorised insolvency specialist. The role from the insolvency specialist would be to behave as a specialist, mediator and middleman. In the end, an IVA is can only be effective if you’re really able to meet the conditions and when creditors can therefore be prepared to be paid out a minimum of the original sum owed to them. Finally, the insolvency specialist will make a report supplying a completely independent judgement about your proposal and make these details available to the creditors. Once the creditors have been supplied the required information, they’ll make a vote on the IVA. For a Individual Voluntary Agreement to become recognized, 75 % (in value) of the creditors have to accept it.
Fourth Step: IVA implementation
When the IVA terms have been agreed on the agreement will be valid for 5 years. Following the end of the IVA period, all remaining debts are wiped off.