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.
Creditors have a vested interest in the success of your IVA since achieving the dividend depends on your adhering to the agreement made with them. Of course you yourself want the IVA to succeed and the third party is your supervisor who as a professional insolvency practitioner wants to make sure that your insolvency problem is resolved to the satisfaction of your creditors.
The supervisor is responsible for measuring the performance of your IVA and for compiling regular reports on it, starting with what is called the Chairman’s Report of the Meeting of Creditors when your IVA was originally approved.
You will already have signed off on your IVA proposal which was sent to all your creditors and which was the basis for your IVA. Creditors will have voted on the proposal accepting it as it was offered, rejecting it as it was offered or (and this is usually what happens) accepting it subject to your agreeing certain modifications. Most (but not all) modifications of your proposal seek to increase the dividend to creditors by seeking reductions of the administration costs of the IVA or an increase in your (the debtor’s) monthly (and lump sum) contributions or a combination of all of these elements.
The nominee (the Insolvency Practitioner – IP in short – who is acting on your behalf and who called the Meeting of Creditors) will have discussed all modifications with you and with your creditors who put them forward. Creditors may sometimes agree to change the modifications if presented with compelling arguments to do so but generally you the debtor are faced with a decision to accept them or not as they are proposed. Assuming you accept the modifications – and your nominee will require you to confirm this in writing – your IVA is approved if over 75% of voting creditors agree. Your nominee then prepares the Chairman’s Report of the Meeting of Creditors and circulates it to various parties, including your creditors and yourself. This provides all relevant information including the modifications, how creditors voted and so on. This report together with your original IVA proposal is really the blueprint of your IVA.
Now that your IVA is up and running, your supervisor (the IP who is supervising your IVA and who is often the same person as your nominee) will receive all your payments and distribute dividends to your creditors. The supervisor also has a duty to review the conduct of your IVA and to report to your creditors – usually annually. The annual review may also require you to increase your monthly or other contributions to your IVA. Your supervisor must provide you with a copy of the Annual Report to Creditors. This report will include all the information you need to keep you informed as to how your IVA is going. If your supervisor should fail to provide you with a copy of this report, you have grounds for complaint. Your IVA proposal and the Terms and Conditions accompanying it should describe the complaints procedure available to you.