So you now know the benefits an IVA can have for you and how it can lead to debt freedom but how exactly is an IVA set up?

The Typical IVA Process

Initial Contact with us

You submit your details to The Debt Clinic.

We find a suitable person to help you

We immediately search our database of licenced and qualified insolvency practitioners who specialise in IVAs & Debt Management, to find the most suitable one for you.

Our partner contacts you

You will receive a phonecall either from us or from one of our selected partners who will take a few further details from you. If they decide that they can help you they may ask for a few more details from you either verbally or via post. They will ask you to send a formal letter of instruction authorising the insolvency practitioners to contact your creditors. This will ensure that creditors stop contacting you and contact your insolvency practitioner instead. This will instantly ease the pressure upon you.

Our partners Collect Supporting Evidence

The insolvency practice is required to collect evidence that shows that what they are being told is true.
This due diligence makes sure that the proposed IVA is fair to creditors and also fair to you.
It also makes sure that you can afford the payments. i.e. That you are able to live without discomfort, and that you will be able to keep up the payments for five years. 

They will require:
 
Evidence of debts (e.g. statements from each creditor)
Proof of income (e.g. payslips)
Proof of expenditure (e.g. rent, monthly bills, etc.)
Value of assets (e.g. property valuation, make/model/year of car, etc.)
Formal identification (e.g. passport, drivers licence)

A Draft IVA Proposal is sent to you

A formal IVA proposal is put together and sent to you.

You sign the IVA proposal and send it back to your practitioner.

The draft IVA proposal is signed and returned to your Debt Management company along with any alterations and missing information required. The IVA proposal is then updated and returned to you for final approval.

A report is prepared to comment on your offer to your creditors. This report along with your IVA proposal is lodged in court. This is a formality, you will not be required to attend court unless there are exceptional circumstances. If there are such circumstances, you will be advised.

IVA Proposal Sent to creditors

Once the IVA proposal has been signed by both the debtor and also by the Insolvency Practitioner who is acting as the Nominee, then copies are sent to each of the creditors.
Each copy is accompanied by any required background information and a covering letter from the Insolvency Practitioner.
The creditors are asked to read the proposal and vote on whether to approve it or not. They are also asked to provide proof of the claim they have for the debt.
Copies are also sent to the local county court and to the insolvency service.

Creditors Reviewing and Voting
The creditors are given a minimum of two to three weeks to review and respond to the proposal.
Often it is a specific department of the creditor that deals with the IVA, e.g. the Collections and Recoveries department.
Also the major banks tend to use one of the major accounting firms to help them process all of their IVAs. 70% or more of UK banks are represented by PwC, KPMG or Grant Thornton.
Sometimes it takes a few days for the proposal to be forwarded to the correct department or external firm.

Meeting of Creditors
A specific date and time is set to bring together the votes from the various creditors. The Insolvency Practitioner acts as the chairman of this meeting.
This is almost always a virtual meeting whereby the creditors send through their votes in advance by fax or by post. So there is no real meeting, it is more of a point in time to count up the votes.
Creditors can choose to 'Approve', 'Reject' or 'Approve with modifications'. Some creditors do not vote at all.
If 75% (by value of debts) of voting creditors approve the IVA, then it is approved for all creditors including those who rejected or did not vote.
If it is undecided the Insolvency Practitioner can put back (or adjourn) the meeting while he communicates between the creditors and the debtor. He can continue to do this for up to two weeks.

Post Meeting Set Up
Once the IVA has been approved, all of the relevant parties must be informed.
The Insolvency Practitioner sends out a Chairman's Report that documents the voting and the outcome of the meeting.
The court is also informed and a notice is sent to the Insolvency Service so that they can record the IVA on the Insolvency Register.
At this point a new bank account is set up for the IVA into which the payments are made monthly, and the Insolvency Practitioner begins the Supervision period.

CONGRATULATIONS! YOUR IVA PROPOSAL HAS NOW BEEN AGREED!

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