A concern for people who find themselves insolvent and who are considering entering into an Individual Voluntary Arrangement (IVA) is whether they can afford the costs and fees of the process. While this is an understandable concern, it should not really be a worry. Firms which provide insolvency services can reassure debtors on this matter and put debtors’ fears to bed quickly.

When an insolvent debtor enters into an Individual Voluntary Arrangement (IVA) with creditors, all unsecured accounts automatically go into default, given that the debtor immediately ceases to comply with the terms and conditions of the relevant credit agreements.

Any good proposal for an Individual Voluntary Arrangement (IVA) will include a sensible, realistic and well constructed Income and Expenditure Statement (I&E). For anyone who is contemplating offering proposals to creditors for an Individual Voluntary Arrangement, it may be a concern as to whether creditors will look for the last penny of disposable income to be contributed to the IVA, with no provision for emergency expenditure or for ‘rainy day’ events. These events might include illness or injury to a member of the family or unexpected vehicle breakdown or the necessary replacement of a domestic appliance such as a heater or cooker.

Individual Voluntary Arrangements are pretty flexible, but there is a typical set of requirements for an IVA to be likely to go ahead. IVAs are for personal unsecured debts, and do not usually cover secured debt such as mortgages, although an IVA may be used as one measure in reducing the financial strain of multiple debts.

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.

The purpose of these articles is to provide simple and straightforward answers to questions that people would like to ask about IVAs and insolvency in general but may refrain from doing so for all sorts of reasons. Let’s start by looking at a situation when somebody is planning to get married but is afraid that their fiancé may be insolvent and that their insolvent fiancé’s creditors might seize their assets. While love may be blind, it would be normal for couples to disclose to each other the state of their finances before getting married or even starting to co-habit. This is sensible because failure to disclose financial problems before starting to live together could lead to a breakdown of trust later on in the relationship when one party turns out to be insolvent and their financial difficulties come to the attention of the other solvent party.

If you are considering entering into an Individual Voluntary Arrangement (IVA) with your creditors you will naturally want to be confident that they will approve your IVA proposal. The overriding question is whether your offer will be sufficiently attractive to at least 75% of those creditors who choose to exercise their right to vote to persuade them to accept your proposals. So what do creditors or to be more precise your particular creditors want to see in your proposal documents.

A lot of effective compensation claims have been made and continue to be made against lenders with regards to Payment Protection Insurance (PPI). Any person who considers that they may have been miss-sold a PPI policy is eligible to claim against the lender and a large number of such borrowers already have garnered damages from the offending creditors.
In the context of an individual entering into an Individual Voluntary Arrangement (IVA) where one or more loan companies offered PPI previously, the consumer could make a claim for the purpose of compensation against any financial institution who miss-sold this type of protection plan. The fact that payment of the Payment protection insurance premiums may have contributed to the borrower’s failure to pay off their debts and obligated the person in debt to go into an IVA is not applicable.

If you have money worries and feel that you may be insolvent, you might like to learn about an Individual Voluntary Arrangement (IVA) and how an IVA could make life better for you. Remember that having money worries in itself is not sufficient to qualify you for an IVA. You must in fact be insolvent.

A good Individual Voluntary Arrangement (IVA) proposal will have at its heart a sensible, realistic and well constructed Income and Expenditure Statement (I&E). A concern for anyone who is contemplating entering an IVA is whether creditors will look for the last penny of disposable income to be contributed, leaving nothing for emergencies or for ‘rainy day’ events.

An Individual Voluntary Arrangement (IVA) is a formal agreement between an insolvent debtor and his or her unsecured creditors to repay a portion of the unsecured debts over a limited period of time. The duration is usually five years, but it can be for a shorter or occasionally a somewhat longer period.

Euphoria following acceptance

For anybody who proposes an Individual Voluntary Arrangement (IVA) to their creditors, it’s an occasion of great satisfaction and sometimes unbridled joy when the day of the Meeting of Creditors (MOC) comes round and they learn that their IVA has been approved by creditors. They can now look forward to being debt free in a reasonable period of time. No more debt collectors, no more threatening or harassing phone calls from creditors, no more bills, invoices or statements of account and no more threats of legal action. Visits from bailiffs are a thing of the past.

Three parties have a keen interest in how your Individual Voluntary Arrangement (IVA) is going, once it is up and running following acceptance of your proposals by your creditors.

Most Individual Voluntary Arrangements last for 60 months (5 years) as standard, and in this time the debtor will make fixed payments each month. The IVA proposal sets out what the debtor’s offer of repayment to creditors is. If the debtors disposable income increases during the term of the IVA the creditors will expect to see the debtors monthly payments to them also increase.

Many successful claims have been made against creditors in relation to Payment Protection Insurance (PPI), where the borrower has been miss-sold a PPI policy and many such borrowers have received compensation from the offending creditors. In the context of a borrower entering into an Individual Voluntary Arrangement (IVA) where one or more lenders provided PPI in the past, the debtor may make a claim for compensation against any creditor who miss-sold such a policy.

The IVA process has three principal parties involved. First there is the debtor who is insolvent; secondly there are the creditors from whom the debtor has borrowed money which he (or she) cannot now repay (in full at least); finally there is the Insolvency Practitioner (IP) whose role includes acting as an honest broker between the debtor and the creditors. For an IVA to succeed, each of these three parties must work together with the others in honest and transparent relationships.