If you have decided, with the help of an Insolvency Practitioner, to apply for an Individual Voluntary Arrangement (IVA) to help manage your debts, there are a number of things that will happen. Your IP should keep you informed throughout the process, and will be able to explain what is going to happen at each stage.
Interim Orders
The first thing that your IP will do once you have decided to go for an IVA is apply for an Interim Order through the court system. This stops your creditors from taking any legal action regarding your debts while the IVA is being set up and proposed. If you’re in the position where your debts are being pursued legally this is a hugely important act, and gives you the breathing space to work out and arrange the IVA without having to worry about the threat of legal action.
IVA Proposal
Your IP will help you to work out how much you can realistically afford to pay as part of an IVA plan. They will do this by having a good look at your finances, including debts, assets, income and outgoings. Based on this they will suggest a plan, and providing you agree to it this plan will be presented to your creditors through the courts.
IVA Acceptance
The creditors will have a meeting at which they discuss your proposal and they each have a vote as to whether it is acceptable to them. It is not necessary for all of them to agree to it however, as providing enough of them do it will indeed go ahead, and will include all of the debts you have proposed it for.
Sometimes the creditors will ask for changes to be made, and your IP will handle the negotiation process, only finalising an arrangement that you agree to and have had time to consider carefully. The whole process typically does not take long to set up, and is usually up and running within a few weeks.
The Arrangement
Once the arrangement is agreed on, your IP will be responsible for administering it. You will be making your payments into one single fund, and the IP will explain how to start the process.
Security
While the IVA is being set up and once it starts, you will have a level of legal protection against your creditors hassling you for the debts. If the IVA goes ahead and you keep to it, you will no longer need to worry about them taking action against you, and can look forward to being free of the debts once the IVA is complete.
There can be an amount of negotiation and deliberation involved in setting an IVA up, but in most cases this is not a lengthy process.