There are various legal processes that will necessarily be carried out if you attempt to use an Individual Voluntary Arrangement. Only certain professionals can carry these out within the law, as an IVA is a legal contract between you and your creditors. Insolvency Practitioners are the only professionals who are actually licensed to carry out the activities involved in both setting up and administering an IVA.
Roles
For the initial stages of getting your IVA set up, your IP will be acting as Nominee. This means that they will be responsible for putting your proposal to the creditors through the court system. They will help you to work out what the proposal should contain, and will draw it up in an acceptable way.
Interim
The IP will also apply for an Interim Order for your case in the short term, while the IVA is being drawn up and proposed. This order prevents your creditors from taking any legal action regarding your debts for the time being.
Proposal
Your IP will help you to arrive at a proposed IVA payment plan, taking into account the details of your finances, from income and assets to outgoings and total debts both secured and unsecured. The plan will need to be realistically manageable for you, and making your monthly IVA payments should not leave you too short to maintain a decent standard of living.
Meeting
Once the IVA proposal has been drawn up, your IP will recommend holding a meeting of your creditors. These are the creditors whose debts you are hoping to include in the IVA, so it’s imperative that you make sure you pass the relevant details of these debts on to your IP. They will need to know the amounts of outstanding debts that you have to each creditor, and the details of your accounts with them, i.e. account numbers etc.
Vote
At the meeting, the creditors will each have a vote as to whether the IVA is acceptable to them. As long as enough of them vote to accept it, it will go ahead, and will include all of the debts listed within it, even in cases where those particular creditors did not vote to accept it.
Throughout the proposal and set up process, your IP will be acting as Nominee for the agreement. Once the IVA actually starts, the role of the IP will become that of the Supervisor for the IVA. This means that they will have to keep an eye on the progress of the arrangement, and they will handle the distribution of the IVA funds you have paid to your various creditors.
Profession
Insolvency Practitioners are regulated within UK law, and are required to demonstrate a level of professionalism on an ongoing basis. Licensed IPs are therefore in a position to give trustworthy advice and guidance, and to use the law to protect those involved in the IVA process. IPs are licensed by the Insolvency Practitioners’ Association, who lay out the standards and practices for the profession as a whole.