In this section of the E-insolvency.co.uk website we will explain how an IVA works

This part of the E-insolvency site will provide an explanation of how an IVA works to help you decide if an IVA is right for you.

How does an IVA work?

Once a decision has been made that an Individual Voluntary Arrangement - IVA is right for you, you will be asked questions regarding your current financial situation. Based on the information you have given, a repayment amount will be agreed with you. Once proposals have been drawn up you will need to check and sign these and return them to your IP.

An application may then be made to the court for an Interim Order. Once this is in place, no creditors will be able to take legal action against you. A creditor meeting will be arranged to which you should attend.

For an Individual Voluntary Arrangement - IVA to be approved, creditors will be called upon to vote either for or against the arrangement. If only one creditor votes "for" the Individual Voluntary Arrangement - IVA, the Individual Voluntary Arrangement - IVA will be approved. However, if only one creditor votes against the Individual Voluntary Arrangement - IVA and they represent less than 25% of your total debt, the meeting will be suspended for a later date and other creditors who did not vote will be called upon for their vote.

If the creditor who voted against the Individual Voluntary Arrangement - IVA represents more than 25% of the total debt you owe the Individual Voluntary Arrangement - IVA will fail. This is because an Individual Voluntary Arrangement - IVA will only ever be approved if 75% in monetary value is voted for. If any of the creditors don't vote, it is assumed that they will vote FOR the Individual Voluntary Arrangement - IVA.

The Individual Voluntary Arrangement - IVA will be legally binding. As long as you keep up the repayments, when the term of your agreement is finished, you will be free from these debts regardless of how much has been paid off.

During the period of your arrangement your financial situation will be reviewed regularly to see if there has been any change in your circumstances.

Please note that an IVA is a private arrangement between you, your creditors and the IVA Insolvency Practitioner. The only people that will be aware of the IVA are your creditors. Some people don’t even tell their husband or wife about the IVA. The IVA is very different to bankruptcy as it is not advertised or published in 2 local papers and the London Gazette. Please note that your employer will not find out about your IVA unless you tell them.

PLEASE CALL 0800 074 6918 FOR MORE INFORMATION ON HOW AN IVA WORKS