IVA Process:
- Insolvency Practitioner (IP) will evidence your financial situation – income, expenditure, debts and assets.
- This information is put together into a Proposal for your creditors – this is a legal offer of repayments over (typically) a five year period.
- Creditors then vote on whether to accept or reject your Proposal
- Once accepted, you pay your monthly payment to your IP every month.
- Your IP will review your financial situation at least once a year, possibly more often.
- Your monthly payments may change as a result of these reviews.
- Once the IVA has finished, any remaining debts are written off in full.
Consequences of entering an IVA:
- An IVA remains on your credit file for six years, which will make it extremely challenging to obtain credit during that period and will affect your ability to secure loans or mortgages.
- The details of your IVA will be recorded on the Insolvency Register, which is accessible by the public and credit agencies.
- During the IVA, there are restrictions on borrowing more than £500.
- Tenancy restrictions – check your tenancy agreement before entering an IVA as some will state that entering one will result in eviction.
- Hire Purchase – check any HP agreements before entering an IVA as some will demand return of the vehicle/goods upon doing so.
- Employment implications – certain professions and roles, such as those in finance or law, may have restrictions or implications related to entering an IVA.