Setting up an Individual Voluntary Arrangement (IVA)
First
you must find an authorised
insolvency practitioner (IP) prepared to act for you. We
can refer you to one of our many approved IP’s or a list is also
available for you to look at in your local Official Receiver’s
office.
A set of proposals need to be prepared. The IP will normally
assist with these, although they are your proposals and will be
signed by you. The proposals include details of your income and
expenditure, creditors (you must disclose all your creditors, if
you fail to do so and it is discovered at a later date that there
are other creditors, the IVA may fail and you could be petitioned
for bankruptcy), how you became unable to repay your debts and
your proposal for repayment. The proposals will be signed by you
so you need to ensure that you understand and accept them. IP’s
charge a fee for assisting in preparing the proposals and acting
as Nominee.
In some circumstances the proposals are sent to your local court
and the IP applies for an "interim order”. This prevents your
creditors from taking court action against you including
presenting, or proceeding with, a bankruptcy petition against you
while the interim order is in force and without the permission of
the court.
The IP will arrange a meeting of creditors and full details of the
proposals will be sent to them in order for them to vote in favour
or against the IVA.
At the meeting, the creditors vote on whether to accept your
proposals. If enough creditors (over 75% in value of the creditors
present in person or by proxy, and voting on the resolution) vote
in favour, the proposals are accepted. They are then binding on
all creditors who had notice of, and were entitled to vote at, the
meeting.
After the meeting the IP sends a copy of the Chairman’s report to
all the creditors informing them of the outcome, including any
modifications which were made to the proposals at the meeting.
If the proposal is approved, the IVA becomes legally binding.
Throughout the duration of the IVA the IP acts as Supervisor of
the IVA and pays the creditors in accordance with the accepted
proposal. The IP will charge a fee for acting as Supervisor.
Annual reviews of your income and expenditure will be undertaken
and annual reports sent to your creditors. Provided you comply
with the terms of the IVA at the end of the arrangement all your
liabilities included in the IVA should be satisfied.
If you want to consider this and require assistance in writing
to your creditors, contact us now on 0845 890 2277
