When you explore the use of an Individual Voluntary Arrangement, you will be required to put forward a proposal to your creditors. Your creditors will vote as to whether or not the IVA proposal is acceptable to them.
They may ask for changes to be made before they will accept it. The creditors will meet and vote on the proposal and, providing enough of them vote to accept it, it will go ahead.
The IVA Proposal
The importance of getting the right IVA proposal is significant. As well as making sure the proposal is likely to appeal to creditors, it must be manageable for the debtor also. The IVA plan must be one that you can realistically manage, making monthly payments while still having a good standard of living. The better the proposal, the more likely your IVA is to be a success. Getting the wrong proposal makes the IVA more likely to be rejected, or to fail once it is up and running.
Your Insolvency Practitioner will help you to put your IVA proposal together, and acts as the Nominee while the proposal process is being carried out. They will know how to tailor the proposal in a way that will make creditors more amenable to it. However, they also need to make sure that you understand the implications of the proposal and that you are willing to sign up to it.
Your information
An IVA proposal is made up of a number of component parts. It must include an overview of your assets and liabilities, so that the creditors can get a sense of your overall financial state.
Your IVA Payment
The IVA proposal will also put forward a payment plan, indicating the period over which the IVA should be carried out, and what you are proposing to pay your creditors during this time.
Your situation
Your IP will also include comments on your proposal and your situation. If there have been issues or events in your life affecting your finances in the past, these may be included. Similarly, if you have future plans that may affect your income, these should also be included in the proposal.
Creditors meeting
The IP will propose to the court that a meeting of your creditors should be held to consider your IVA proposal. The proposal is forwarded to the relevant creditors so that they may consider and ultimately vote on it at the meeting.
Your IP will guide you throughout the process of putting forward an IVA proposal. If you have any questions or issues regarding it, make sure you bring them up and have them clarified before the IVA goes ahead.
An IVA is only going to be a success if you have put forward a proposal that works for you.