Once an IVA is set up, you will be required to make your monthly payments towards it. Your Insolvency Practitioner will guide you through the process and will be responsible for handling your IVA while it is ongoing.
Providing enough of those creditors whose debts you listed as part of the IVA agreed to it, all of the debts will be covered by it. This means that even if one or more of the creditors did not agree, providing a sufficient majority of those involved did, all of the debs will be covered.
No legal action
The creditors whose debts are included in the IVA are not able to take any legal action or pursue you in any way for those debts while the IVA is elapsing. This means that as soon as your IVA is set up you need no longer worry about the threat of court action regarding these troublesome debts.
Contract
When you propose an Individual Voluntary Arrangement, you are proposing to pay a certain amount over a period of time. If the IVA is accepted, you are legally bound to it, as it is a legal contract between you and your creditors. In the same way, the creditors are legally bound to it too, and this is why they are unable to take any other action against you.
Changes in circumstances
If your circumstances change during the IVA, there are a number of things that may happen. If you feel at any time that you are going to be unable to keep up with your IVA payments, you should contact your IP immediately and give them the best possible chance of keeping the IVA going.
Improvement
If, while the IVA is elapsing, your finances change for the better, your IP may recommend that you increase the IVA payments you are making. They will always talk such matters through with you before anything actually changes, so you don’t need to worry about unexpected changes to the IVA.
Deterioration
Should your finances change for the worse during the IVA, your IP may be able to try different measures to prevent the IVA from failing completely. They may be able to arrange a payment holiday for you, if your circumstances are likely only to be problematic in the short term. Alternatively, they may be able to renegotiate the deal with your creditors, and possibly reduce the payment amounts. When these things happen, it is likely that the term of your IVA may be lengthened.
If you fail to make the payments for your IVA and do not manage to secure an alternative agreement to keep it going, then the IVA may indeed fail. In this case your creditors will be free again to pursue your debts through the legal system. If this does happen, it’s imperative that you speak to your IP as soon as possible. Getting sound advice early can make a huge difference in protecting yourself.
When you go through the IVA process, your IP will be able to give you the guidance you need at any time.