• You will need to complete an application form disclosing your financial situation as well as including copies of recent bank statements, pay slips, mortgage statement, property valuation, creditor's letters/statements.
• The company you are dealing with will contact you to discuss your situation and the IVA application.
• If your application is accepted you will become part of the IVA programme and will be assigned an Insolvency Practitioner to work with.
• The Insolvency Practitioner will then act on your behalf to contact all of your creditors to inform them that they are your legal representative and that an IVA proposal is being put together.
• An IVA proposal will be drafted. This sets out the actual terms of the IVA - how much you will pay and so on.
• The IP will obtain an 'interim order'. An interim order provides you with protection from your creditors issuing or continuing with bankruptcy proceedings.
• A statement called a 'nominees report' is prepared with gives a professional opinion as to whether the IVA is a genuine offer.
• A meeting of your creditors will be held. This will be to vote on whether the IVA goes ahead or not. Creditors will usually not attend in person, rather they will send a letter or fax outlining whether they agree or not. Any creditors that do express an opinion are taken to be in favour. For the IVA to be accepted creditors representing over 75% of your debt must be in favour.
• Once the IVA is approved your are legally obliged to keep up your monthly payments and your creditors should not contact you directly.

During an IVA
An IVA is designed so you make one monthly affordable payment, over the period of the IVA. The payment is made to your Insolvency Practitioner, who in turn deals with your creditors and sorts out money owed to them on your behalf in accordance with the terms set out in the IVA.

The IVA is legally binding. You must ensure you keep up with your monthly payments or action may be taken against you and you will most likely be made to go bankrupt. If this happens the cost of the IVA will be added on to your total debt.

During the IVA period your financial situation will be explored and reviewed on a regular basis. If there has been a change in your circumstances, for example an increase in income, or a sudden windfall, you may be asked to pay more money to your creditors, in accordance with the terms set out in the IVA. 

Any property owned by the individual normally has to be re-valued during the term (4th Year) and any increase in the equity has to be realised for the benefit of the creditors.

You are required not to obtain any further credit or loans during the period of the IVA.

After an IVA
After the period of the IVA is complete the debtor will be considered to be debt free, as the remaining debt will be written off. The debtor will then be debt free. Once the IVA is complete it is often difficult to obtain credit again for a year or two after the termination of the agreement. However it is easier to obtain credit once your debt problem has been settled and many lenders will make a decision based on your successful completion of an IVA and what you can afford to pay.

IVA companies will arrange an IVA on a customer's behalf. They work with both the client and the creditors to come to a suitable arrangement.

What an IVA company can normally offer a person with a substantial amount of debt:

• They can normally stop legal proceedings going any further.
• They can cancel or reduce interest charges.
• They can agree a reduced and affordable monthly payment between you and your creditors.
• They can stop you receiving demanding letters and phone calls from your creditors.
• They can give you the chance of having a fresh start and peace of mind that you are finally getting out of debt.
• They can help you avoid bankruptcy (although this will depend upon you meeting the monthly repayments)
• It should be noted that taking on an IVA should not be seen as an easy way out and it does not guarantee that you will not fall into bankruptcy.
• Be very wary about any companies that ask you to pay money up front. Most decent IVA companies will not charge you a fee directly; rather they will take a cut of the money that you repay to your creditors.

IVA Advantages
- The opportunity to write off a substantial part of your debt.
- The monthly amount you pay is calculated on what you can afford to pay i.e. depending on your income and outgoings.
- Interest and charges on your debt will be frozen so your debt cannot increase during the period of the IVA. 
- With an IVA you can safeguard against losing assets such as your property. 
- There are no hidden fees with an IVA.
- Unlike bankruptcy an IVA is not advertised.
- A very simple IVA could be completed in 4 months and can last for up to five years.
- You can continue to run your own business and continue as a company director when you enter into an IVA.
 
There are two types of IVA, there is the 60 monthly payment plan as described above and the there is the Full & Final Voluntary Arrangement. The Full & Final Arrangement carries all the benefits a 60 month plan carries, however it cuts the time from five years to three to four months. The client would require a lump sum of at least 40% of the total debt, once this is received the voluntary arrangement would be completed. A big advantage of the Full & Final Voluntary Arrangement versus the 60 month IVA is there will be no re-valuation of any asset you have that may have grown, including your home.

Debt Helpline UK 07956 210422