The Individual Voluntary Agreement or IVA process can be usually broken down into 5 to 6 stages. It generally takes about 6 weeks from the vest first beginning to finish, although it completely depends on how fastly you can send the required supporting evidence to your advisor.
Mlso, here you need to be sure an IVA settlement plan is the best suited solution for your current financial situation by getting in touch with an impartial Stepchange Debt advisor. Well, the advisor must verify all the necessary details such as your expenditure, income, assets all ng with the debts in detail for calculating realistically how much you can afford to offer your lender each month & decide whether your lenders are possibly to approve your IVA settlement plan. The advisor must also explain all of your other alternatives to you, like Bankruptcy, at this point.
What is the process of set up an IVA ?
So, if an IVA settlement plan is best suited for your situation then a Statement of Affairs is drafted based on the details you have already mentioned. The Statement of Affairs is the consolidated view of your recent financial situation (liabilities along with assets) & forms the basis of your Individual Voluntary Agreement proposal.
Well, the proposal (which is generally drawn up by a professional IP acting as Nominee) will also contain lender details along with the breakdown of your expenditure and income and any supporting evidence that you might be needed to provide (bank statements, pay slips etc). And at this stage, your Nominee might also apply for an Interim Order, that is actually a legal injunction preventing your lenders from taking any sorts of action against you unless your Individual Voluntary Agreement proposal has been considered.
So, assuming that you are absolutely satisfied with the proposal, it’s then distributed to your lenders as well as the Insolvency Service & local county court. As a result, the proposal document recommends a date for your Individual Voluntary Agreement application to be evaluated (no sooner than 14 days after the settlement plan is published); this is referred to as the Meeting of Creditors (and in practise, the majority of lenders use voting agents to act on their behalf). Changes to your settlement plan can be proposed during the meeting, but they are more likely to occur in the weeks or days leading up to it. Your appointment may be postponed if your lenders require more time to review your proposal or further evidence.
At the meeting, your lenders will vote on whether to reject or accept your proposal. 75% of the votes (by main value of debt) should be in favour of the proposal for it to be accepted. However, if this happens, all of your unsecured lenders, whether they voted yes, no or did vote at all, are actually obliged to abide by the terms of the Individual Voluntary Agreement.
When approved, each and every relevant party is informed & a supervisor is appointed (generally it is the same IP that acted as Nominee) to monitor monthly payments & assure you’re abiding by the terms of the Individual Voluntary Agreement.
So, as long as you continue making payments (see what occurs if I do not keep up all the payments on my Individual Voluntary Agreement) for the agreed length of time (usually 5 to 6 years), you’ll be discharged from the liabilities on completion of the IVA settlement plan.
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Your duties and responsibilities
If you do not make your payments on time, your IVA may be terminated by the insolvency practitioner. The insolvency practitioner has the power to declare you bankrupt.
If you have a business, you may still be able to keep it functioning.
The ramifications of a remortgage under an IVA
The total amount of debt secured against your home does not exceed 85% of its current market value (this is called the Loan To Value). This implies you won’t be able to remortgage your home for more than 85 percent of the current market rate.
The remortgage’s monthly payback cost is within the client’s budget (any increase in mortgage payment will be subtracted from your monthly IVA payment and will not exceed 50 percent of the payment into the IVA).
You will not be able to release more equity than the amount of unsecured debt you owe (excluding statutory interest).
The debtor’s state retirement age or the existing mortgage term will be the limit of the IVA remortgage period.
The amount of money put into the arrangement will be net of professional or redemption expenses (i.e. you won’t have to come up with this money on your own).
At the time of the review, the available equity ([current market value of house * 85 percent LTV] – existing secured loans) exceeded £5k (anything below this amount is considered de minimis and will not need to be released).
To account for any rise in mortgage instalments, your IVA payments will be proportionately decreased.
If you have equity in your house but are unable to remortgage, your Supervisor may request that you continue making IVA payments for another year. The value of the equity you were unable to release should not be exceeded by these payments.
Debt classifications
Your IVA proposal might cover a wide range of debts. The following debts are eligible:
Credit cards are accepted.
Cards to keep in your wallet (a credit card you can only use with one store or chain)
Overdrafts
Loans for students
Payday loans are short-term loans.
Debts owed to relatives and friend
How can I make the IVA application process go faster?
One of the main reasons an IVA takes 4 weeks to setup is that you must submit proof of your financial situation. You’ll be asked for identification, current bank statements, and pay stubs, among other things.
