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What is IVA and How Can You Apply for an IVA ?

What is IVA and How Can You Apply for an Individual Voluntary Arrangement or IVA?

Struggling with multiple debts is a nightmare until you find an appropriate solution for yourself. An Individual Voluntary Arrangement or IVA is a legally binding arrangement between you and your creditors. IVA is a great option to get relief from debt worries, but you must make sure that it suits your financial circumstances. Otherwise, it can harm your financial situation, and you can have trouble while getting new credits. To apply for an IVA, you must contact an insolvency practitioner. An individual voluntary arrangement can come into practice after your insolvency practitioner convinces your creditors about your financial situation. Additionally, the insolvency practitioner must negotiate the monthly payment amount according to your monthly budget.

Hence, you need to learn what an IVA offers, its risks and benefits, and much more. In addition to this, you should clearly understand how to apply for an IVA. Get debt advice along with everything you need to know with our experts.

Easy Steps to Apply for an IVA

It’s always better to talk to a financial advisor before you take any decision regarding your finances. You should discuss the consequences of an IVA with your financial advisor to get impartial advice from the expert.

Your insolvency practitioner will check out how much you can afford to pay, and this will make your IVA last how long. Don’t forget to share everything about your creditors, income, assets, and other information regarding your finances.

Here are the necessary steps to help you apply for an IVA. You have to contact your insolvency practitioner, and they will handle the rest in the following ways:

Insolvency Practitioner Applies to the Court

First, your insolvency practitioner might apply to the court so that you can get an interim order. This interim order prevents your creditors from taking further action against you. Well, the interim order will stay active until your insolvency practitioner gets the IVA set up for you. It means that your creditors can’t make you bankrupt.

Reviewing your Finances and Payments

After that, the insolvency practitioner will sneak into your finances. They would check your income, assets, savings, and monthly spare income. This is to ensure that you don’t have to struggle while repaying your creditors. Additionally, your insolvency practitioner should know whether you own a home or a car. Your assets can be included in your IVA to repay your creditors, and it will help you raise more money.

Additionally, your insolvency practitioner will advise you on your budget. And, you will end up paying as much as you can. However, you have to pay your creditors; otherwise, your creditors won’t agree to the plan.

Drawing a Proposal of your IVA

Your insolvency practitioner will send your creditors a proposal. The proposal will mention how much you can pay your creditors in full, over a specific period or in part. The IVA should last for five to six years. The IVA proposal includes an in-depth financial statement including properties, assets, income, and debt.

Additionally, the IVA proposal will have the terms and conditions along with the reasons why your creditors will agree to your IVA proposal. Otherwise, they might think about making you bankrupt. It’s your insolvency practitioner’s job to convince your creditors, and 75% of your creditors should agree to the agreement to make the IVA fruitful. However, you should not impose any other certain conditions on the IVA. Or else your insolvency practitioner can reject your IVA.

Creditors’ Approval to your IVA Proposal

Your insolvency practitioner will call in your creditors. An IVA is a perfect debt relief scheme for those dealing with multiple creditors. And, most of your creditors should approve the proposal. Nevertheless, your IVA won’t come into action. Usually, the meeting between your insolvency practitioner and creditors will be at your insolvency practitioner’s office.

You are not liable to attend the meeting. But, you should be present there if you want to represent anything on your behalf. This is not mandatory as your insolvency practitioner will handle everything. If most creditors vote for your IVA proposal, then it is approved. And, the court will receive the information that you have achieved an active IVA.

Need Expert Help?

Applying for an IVA is not a difficult thing. Yet, you should be aware of every possible consequence when making your mind for an individual voluntary arrangement. Your insolvency practitioner and creditors will sign up to the IVA protocol or the voluntary code of practice. The protocol bears the transparency of the entire IVA process.

If you want to learn more about IVA and whether it’s suitable for you, reach us. Our financial iva advice experts will provide you with the right piece of advice on how to apply for IVA, criteria, and everything. Hire our specialists as insolvency practitioners and experience the most-awaited relief from financial stress.


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