Your Insolvency Practitioner (IP) is the main focal person who handles your Individual Voluntary Arrangement (IVA) from start to finish.
Your IP is typically a qualified accountant, lawyer or solicitor and the first order of business for you when applying for an IVA is to find an IP for yourself.
In this post, I’ll be discussing the responsibilities of an IP and how they can help make sure that your IVA is a success.
What Role does an Insolvency Practitioner Play in My IVA?
Insolvency practitioners are responsible for handling a number of different aspects when it comes to your IVA.
Let us look at the different aspects that your Insolvency Practitioner is responsible for:
Setting Up Your IVA
As I mentioned earlier, the very first step you have to take when opting for an IVA is to find an IP for yourself.
This is because their work starts before your IVA is even put in place.
When you go to an IP to set up your IVA, firstly, they will look at your finances and determine whether an IVA would even be suitable for you or not.
They will determine the suitability of an IVA for you by looking at your monthly income, your assets, your monthly expenditure and your debts.
If your IP feels that an IVA would be right for you, then they’ll start devising your IVA payment plan and your IVA proposal with you.
Your IVA proposal is a document that is presented to your creditors which states the terms of your IVA.
It will include all of the rules that you as well as your creditors will have to stick by.
It will also include your complete payment schedule which you’ll have to stick to.
Your IP will sit down with you and help you make this payment plan based on your monthly income and expenditure. It’s your IP’s responsibility to come up with a payment plan that is both affordable to you as well as acceptable to your creditors.
Once your IVA proposal has been written, your IP will take it to your creditors. This brings us to your IP’s next role…
Dealing with Creditors
As mentioned above, your IP is the one who communicates your IVA proposal to your creditors.
If 75% of your creditors agree to your proposal, then your IVA is accepted and put into place.
Once your IVA is in place, you no longer have to communicate with your creditors. Similarly, your creditors are also not allowed to contact you or harass you regarding your debts.
Instead, all communication has to be done through your IP.
Your IP is the one who will be responsible for dealing with your creditors.
Handling Your Payments
If you have multiple entities to whom you owe money to, your monthly IVA payments will not be distributed evenly among them.
They will be distributed based on how much money you owe to each of them.
For example, if you owe 80% of your total debt to creditor 1 and 20% of your total debt to creditor 2, then, 80% of your monthly payment will go to creditor 1 and 20% of it will go to creditor 2.
You will not be required to distribute this money among the people you owe, your IP will be responsible for this.
All you have to do is make your monthly payment to your IP and they are the one who will be responsible for distributing the money to each creditor.
Conducting Annual Reviews
An annual review is something that happens, as the name suggests, at the end of every year when your IVA is in place.
The purpose of an annual review is to assess your financial circumstances and determine if any changes need to be made to your payment plan.
Your IP is the one who conducts these annual reviews every year. They will assess your monthly income as well as expenditure in order to determine the state of your financial circumstances.
Of course, depending on your financial circumstances, the amount of money you pay towards your IVA could stay the same, increase or decrease.
Cancelling Your IVA
If you’d like to cancel your IVA at some point for whatever reason, your IP is the person you’d contact.
They’d give you information on what you need to get it cancelled as well as guide you through the entire process.
Cancelling an IVA can have a very negative impact on your finances in the UK so I’d highly recommend that you discuss it thoroughly with your IP before making a final decision.
How can I Find an Insolvency Practitioner?
Insolvency practitioners can be working on their own or they could be working for insolvency companies.
You can find an IP that is authorised and regulated by the Financial Conduct Authority by going to the Insolvency Service website at http://www.insolvencydirect.bis.gov.uk/.
It’s very important that you opt for an IP that is authorised by the Financial Conduct Authority.
How Much do Insolvency Practitioners Cost?
Most Insolvency Practitioners have varying costs and charges. In order to get a rough estimate of what’s the best deal you can have, it’s a good idea to compare different Insolvency Practitioners in your area.
Always opt for an IP who offers an introductory meeting for free in order to determine whether an IVA would be right for you or not.
Please note that you won’t have to pay your IP separately. Their fees will be a part of your monthly IVA payments.
What are Some Documents I Might Need when First Meeting My IP?
When you’re having debt problems and look for an IP, it’s important to note that most of them will require information about your finances.
While you can give them all this information verbally, it’s a good idea to bring documentation and proof with you as you’re going to have to provide them later on in any case.
Make sure to have copies of the following documents with you when you’re going to meet your IP:
- Proof of income. This could be in the form of bank statements, wage slips or benefits letters.
- Documentation of any savings that you may have. This could be in the form of bank statements.
- Documentation of your mortgage or rental agreement.
- Documentation about any valuable assets that you have such as a house or a vehicle
- Details regarding your debt problems as well as who you owe debts to. Make sure to bring all documents related to your debt such as letters, etc.
- A summary of your budget which details your monthly income and expenditure.
Having all of these documents on hand when you meet your IP for the first time will help them give more effective debt advice to you.
They will have an easier time determining whether an IVA would be right for you and what your IVA payments would look like.
Insolvency practitioners are the backbone of every IVA. Without them, debtors would have an extremely hard time navigating through the entire process.
Indeed, a good IP can make all the difference when it comes to the success of your IVA. Thus, you should take your time and choose carefully.