The good news is the whole IVA process – from set up to approval – can be completed in less than six weeks. Moreover, we’ll do most of the complicated stuff during this time.
This is how an IVA works:
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During the application process, the insolvency practitioner will work with you to determine such matters as how much you owe and what you can afford to repay each month. Once this is done, they’ll be able to recommend if an IVA is the best debt solution for you.
If so, an IVA proposal will be created.
Working with the insolvency practitioner, you’ll help create an IVA proposal. Setting out a clear case for the IVA, this is then presented to your creditors during a ‘meeting’. Providing the organisations who hold at least 75% of your total debt agree to the terms, the IVA is approved.
Generally, as long as the IVA gives your lenders a better return from them than bankruptcy, they should agree to the terms. If not though, you and the insolvency practitioner will usually be allowed to make amendments to the proposal and try again.
Although the phrase ‘creditor meeting’ conjures images of people sitting together in the same room, in practice this doesn’t generally happen. The date of the meeting is just a deadline for votes on the IVA proposal.
If there is a meeting at all, it will usually be carried out online or over the phone. You also shouldn’t need to attend but just be contactable on the day to confirm the outcome of voting.
If your creditors agree to the IVA, then interest and charges are frozen on your debts, direct contact with these firms should cease, and you can now start bringing your finances under control.
After working closely with the insolvency practitioner, you should know exactly how much you’ll need to repay on the agreement each month. You’ll usually need to make these payments until the IVA ends – typically this will be in about five to six years.
Once that happens though, any remaining debts will be written off.
As the IVA is legally binding, it’s important these payments occur. Although the agreement is not entirely inflexible and can sometimes be adjusted for changing circumstances, you may need to budget for the next few years to ensure IVA payments keep happening.
Fortunately, the amount you’ll have to pay per month shouldn’t be excessive as you and the insolvency practitioner will help determine what you can afford to make.
By this point, an IVA probably sounds like a good idea. To determine if this is right for you though, you should ideally fulfil the following criteria:
If this sounds like the best solution to your debts, click on the button below. We’ll help get your IVA application underway: