In the UK debt management industry, IVAs are the exclusive option. There are six stages of this process. 6 months are usually required in completing the process but it basically depends when you started sending the essential supporting evidence to your advisor.
An IVA is a legal agreement between you and your creditors for the period of five years. It allows you to agree an affordable payment and write off your unaffordable debt.
Is IVA the right option for you?
Debt gives too much stress and you definitely need to find a way to escape it. IVA is a better solution but it is not right for everyone. It depends on the circumstances of a client that which debt solution is suitable for him. Talking to an expert advisor can let you know if you are an ideal candidate for it or not.
Insolvency practitioners can guide you in the best possible manner because they have in-depth knowledge about IVAs. There are many benefits of entering into an IVA but like other debt solutions there are also some disadvantages. It is important for you to talk to a professional debt advisor so that he may start some of your debt paperwork for the evaluation of your financial position and deciding your options.
If IVA is not the right option for you, it will be very upsetting for you as it will cost you more.
Asset evaluation is an important part of an IVA process. You assets are briefly assessed to know whether you could release your debt after selling them or not.
The assets that are included in the evaluation include the shares, costly cars, jewelry and antiques.
Making an agreement proposal
Once your circumstances are evaluated and decided IVA is an appropriate option for you, then let your advisors discus with your creditors to make an agreement of payment.
During the set up of your IVA, your IP has to take Interim Order’ at the county court to prevent the creditors from taking actions against you. A formal proposal with the offer of payment is then made for the creditors. For this purpose you need to collect a household budget to show the extra amount you use to pay them monthly without including debt payments. The payment has to be above £175 a month.
Your creditors vote on whether to accept or reject your proposal
This is probably the most stressful time to start your IVA. This is the time for your creditors to decide whether to accept or reject your proposal. The proposal is approved if it has 75% of the votes.
If the proposal is approved, all of your unsecured creditors are legally obliged to agree the terms of the IVA agreement no matter if they voted yes, no or even didn’t vote.
Your IVA starts
After your creditors have agreed, your IP will assess the assets that are mentioned in the proposal of the creditors and will sell them to pay the money. New bank accounts will be opened for your wages and creditors’ payment. The interests on your debts and charges will be frozen.
You will pay a fixed monthly amount to your IP, who after removing their fees from the payment; give out the remaining amount to your creditors as per IVA agreement terms.
The last step after the last
You will be free from your legal obligations after all the paperwork is complete and the last payment is made. But you are legally bound under the terms of the agreement until the discharge papers are received any remaining outstanding amount is written off, until settlement documentation is proved.
After receiving discharge papers, you are officially free of debt.