When you go through the IVA process, you will need to use the services of a licensed Insolvency Practitioner. The IP will have a varied set of responsibilities as the IVA is set up and then administered. An Individual Voluntary Arrangement is a legal contract binding you and your creditors to the agreement, and only licensed IPs can carry out the necessary legal steps for an IVA to proceed.
Nominee
In the initial stages of proposing and setting up your IVA, your IP will be acting as Nominee. However, once the creditors have agreed to the proposed IVA, the IP will become Supervisor for the IVA. This basically involves administering the IVA as it elapses over the period specified in the proposal.
Administration
Once an IVA is set up, you will typically be making a single payment towards the agreement. Your IP will be responsible for distributing this money to the different creditors involved in the IVA. Your initial IVA proposal will have included an overview of how much you are proposing to pay back over the period, and how much of this each of the creditors can expect to receive.
Changes
While your IVA is in progress, your IP will keep an eye on your finances. If your financial situation changes either for better or worse, the IP may recommend making changes to your IVA deal.
If your circumstances change for the better, the IP may recommend increasing the payments you are making. They will always discuss such a chance with you before anything goes ahead so you don’t have to worry about unexpected increases to your monthly payment amounts. In some cases, creditors may request that you release equity from any property that you may have, typically in the latter stages of the IVA. This only happens in certain circumstances and your IP will talk the possibility through with you when you initially propose an IVA.
If your finances change for the worse while the IVA is underway, there are a number of things your IP can do. Struggling to keep up with the payments does not necessarily mean that the IVA will fail, but if you do start to have difficulty you should speak to the IP as soon as possible. The IP may be able to arrange a payment holiday, adding extra time onto the end of the IVA period if necessary. They may alternatively be able to renegotiate with your creditors in an attempt to keep the agreement going.
Interests
Insolvency Practitioners are required to act in the interests of both creditors and debtors, and so have to ensure that any IVA deal is fair. IVAs are a way to strike a balance between the interests of both sides, and so the IP supervising an IVA has to maintain this throughout the IVA period.
If at any stage you have issues or unanswered questions about your IVA proposal or payment plan, you should speak to your IP and have these addressed as soon as possible.