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The term IVA refers to Individual Voluntary Arrangement. It is a legal accord between you and your creditor. Moreover an IVA usually enables you to only pay off a fixed proportion of your debts. An IVA is controlled and managed by a licensed Insolvency Practitioner. The main duty of an Insolvency Practitioner is to allow you make an agreement with your creditors hence avoiding the consequences of insolvency. Basically an IVA works in numerous ways. So before hiring an IVA company you must know all about how does an IVA Work and how long is the process?
1. When you visit an IVA company to seek the help of an Insolvency Practitioner you will first be interviewed. They will assess your assets and liabilities and how you reached this situation and how much you can afford to put into the IVA.
2. After collecting all the important and necessary information the Insolvency Practitioner will draft a proposal. This proposal is a repayment contract between you and your creditors. You will be asked to approve this proposal before it is sent to the court.
3. After your proposal has been filed, a Creditor's Meeting will be called, usually within a few weeks,
4. The creditors will be sent a copy of the proposal before the meeting. This will enable the creditors to decide whether to vote in favour or not.
5. Creditors may stipulate modifications to the proposal. The meeting can be adjourned for up to two weeks to allow the debtor time to consider any modifications.
6. Votes are cast at the creditors meeting. If more than 75% by value of the creditors vote in favour, the IVA is accepted. If there are insufficient votes, the meeting can be postponed to try and improve the offer to the creditors.
7. After making a final decision the Insolvency Practitioner reports the matter to Court. Now the only thing that is left is the courts approval. After the IVA starts running the debtor must make regular monthly payments to the Insolvency Practitioner without fail. These payments are used to repay the creditors. The performance of the debtor in the IVA will be reported annually.
Towards the end, if the IVA is carried out successfully, then the Insolvency Practitioner will release his final report as well as the dividend. And finally files a conformity certificate that will certify the successful completion of the arrangement.
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