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IVA Register – Complete Guide, FAQs, Advice & More
Once you’ve weighed all the benefits and risks of an IVA and come to the conclusion that it’s suitable for you, you’ll need to start the process of applying for it.
Setting up an IVA for yourself may seem like a daunting task but luckily, the process is not as complex as it may seem from the outside.
How do I Apply for an IVA?
Before you start applying for an IVA, you’re going to need to find yourself an insolvency practitioner (IP). IPs are normally lawyers or accountants and they will be the ones who will be handling dealings between you and your creditors throughout the course of your IVA.
If you’re having trouble finding an IP for yourself, you can get help from an independent debt charity such as Payplan.
You can find an IP for yourself online by going to www.gov.uk. You can also hire a debt management company that will do all of this for you but keep in mind that such a company will have expensive fees in addition to your IP’s fees.
Once you’ve found an IP for yourself, they will discuss your financial situation with you one last time and make you aware of all the options you have besides an IVA. After a thorough discussion with your IP, if you feel that an IVA is the right choice for you, you can then start applying for one.
Step 1: Apply to the court for an Interim Order
Once you’ve decided to set up an IVA, your IP will apply to the court for an interim order that will prevent your creditors from taking any legal action against you. This is to ensure that you are protected from your creditors while you are setting up your IVA. This will mean that they will not be able to get a court order against you or make you bankrupt. Keep in mind that all of this is done by your IP and you won’t have to do anything in this step besides maybe check up on your IP to confirm they’re doing their job properly.
Step 2: Discuss your Financial Situation with your Insolvency Practitioner
You’ve spoken with your IP regarding your financial situation before but now you’ll be discussing it with them in context to your IVA. It’s important for you to be completely honest and transparent with your IP regarding your monthly income, expenditure, savings and assets. It will help them paint an accurate picture of your finances so that you don’t run into any legal trouble during your IVA period.
Your IP will most likely tell you what you need to bring with you in order to fill out the application form but here’s a quick rundown of common things you should have with you when going to discuss your situation with them:
- Proof of your income. This can be in the form of recent bank statements or payslips.
- Proof of savings. This can also be in the form of bank statements.
- Proof and details of your mortgage or rent agreement (if any).
- Detailed information about all assets you own such as a car or property and also how much they are worth.
- All details you have regarding your debts. It’s important that you be thorough about who your creditors are, how much you owe. Be sure to bring all letters, papers and any other documents you may have regarding your debts.
- A budget sheet that details all of your income and expenditures.
Please note that certain assets such as property or a car may have to be included into your IVA in order to raise money to repay your creditors. You don’t need to worry about your house as most IVAs have a special clause that details how your house will be treated. Your IP can also argue to ensure certain assets of yours are not included in the IVA such as a van that you need for your business or a car that you need in order to commute to work.
Step 3: Prepare your Proposal
Keeping your income, spending and debt in view, your IP will help you prepare your proposal that will be presented to both the court as well as your creditors. Your proposal will be a complete detailed plan about how you intend to pay your creditors in part or in full over the course of your IVA period. This period often spans about 5 years.
Your IP will also prepare a separate report for the court on their own which will include their opinion on whether or not the proposal will work.
The proposal must include:
- Your complete financial statement. This will include details of your income, spending, assets and debt to your creditors.
- Your complete repayment plan. This will detail the duration of your arrangement as well as how much of your debt you intend to pay back.
- Reasons why your creditors should agree to the IVA. One primary reason would be that they would get more as compared to you going bankrupt.
As mentioned before, your IP will help you prepare the proposal in a way that it’s most likely to be accepted. They will keep both the rights of your creditors in mind as well as what’s affordable to you.
Please note that if you insist on including certain terms and conditions in your IVA even though your IP has advised you against them, they hold the right to recommend the court against your IVA in their report.
Step 4: Submit your Proposal and Wait for your Creditors’ Decision
Your IP will call a meeting and your creditors will attend in order to hear the proposal and vote on it. This meeting will either be held in your IP’s office or online. You’re not obligated to be present at the meeting but it’s a good idea to be there so you’d be able to defend your interests effectively.
After hearing your proposal, your creditors will vote on whether they agree with the conditions or not. Note that not all of your creditors’ votes hold the same weightage. For example, if you owe 20% of your debt to a certain creditor, that creditors vote will count for 20% of the total vote. You will need a 75% majority of the vote in favour for your IVA to be set up in place.
Your creditors can also suggest changes in certain terms of your IVA during the meeting and you can choose to whether agree to these terms or reject them. Please note that rejecting terms suggested by your creditors may lead to them rejecting your IVA proposal. Try your best to reach a compromise that suits them but is also affordable to you.
When you’re entering into an IVA, it’s essential for you to be aware of any additional charges or fees that may be involved.
An example of this would be the fee charged by your Insolvency Practitioner (IP).
All of your additional fees are adjusted into your monthly payments so you don’t have to pay anything in addition to them during the course of your IVA.
For a more detailed analysis of how IVA fees work, click here.
What is an IVA Register? Is it different from the Individual Insolvency Register (IIR)?
The Individual Insolvency Register is a searchable database that contains information regarding individual insolvencies such as bankruptcies, DROs and IVAs. If you’re in Northern Island or Scotland, your IVA would be recorded in a separate IVA Register.
The Individual Insolvency Register is public and can be accessed by anyone online. It’s a useful resource for employees, landlords and debt management agencies as well as for Insolvency Practitioners.
If you’ve entered into an IVA or any other debt relief solution, your record will be added to the Individual Insolvency Register and it will stay there through the entirety of your program. Once your program ends, your record will be removed 3 months after.
The information included on your record in the Individual Insolvency Register is as follows:
- Your name
- Your gender
- Your date of birth
- Your last known address
- The date your IVA was set up
- The name of your Insolvency Practitioner
IVAs in Scotland
IVAs in Scotland work in fairly the same way as IVAs in England, Wales and Northern Ireland.
They allow you to repay your debts over a certain period of time and it’s a legally-binding agreement.
There are definitely some variations when it comes to how IVAs work in Scotland as compared to England, Wales and Northern Ireland.
For information on IVAs in Scotland, you can click here.
Why Would a Creditor Refuse an IVA?
There can be a number of reasons why your creditor or creditors may not agree to the terms of your IVA proposal.
For example, they may feel that you would be paying a lot less than what you can actually afford they were to enter into an IVA with you.
In such cases, they may suggest changes to the terms of your IVA proposal or may even reject it completely.
For advice on what you should do if a creditor or creditors refuse your IVA, click here.
IVA Requirements and the IVA Protocol
Before you can begin applying for an IVA, there are certain rules and requirements that you need to be aware of. Certain criteria have been set by the government that will determine whether or not you are qualified for an IVA. These criteria have been put in place to ensure only those people receive the opportunity to set up an IVA who can truly benefit from it.
The requirements of an IVA are listed below:
Minimum Application Requirements
- A debt amount of a minimum of £5000.
- A minimum of 3 debts to at least 2 different creditors.
- A steady, regular income that you can rely on.
- Your creditors must be getting a higher return than if you had declared bankruptcy.
- You must reside in England, Wales or Northern Ireland.
It’s important to note that meeting just these requirements don’t necessarily guarantee that your IVA will be approved.
Your creditors must agree with the terms you put forth in your IVA proposal. These terms will be different and unique to every case. Thus, it’s important that you discuss your case thoroughly with your IP so that they can help you write a proposal that your creditors would find agreeable.
Requirements During IVA
Once your IVA has been set up, there are certain rules andspending restrictionsthat you will have to abide by during the entire course of it. These are:
- Your financial circumstances will be reviewed at the end of every year. If your circumstances improve, you may be expected to increase your monthly payments.
- Any windfall sum that you may receive over the course of your IVA must be handed over in its entirety to your creditors. The handing over of this windfall sum will not have any effect on your monthly payments. They will proceed as usual.
- You are obligated to report any notable change in your circumstances. These include a change in employment, a change in residence, etc.
- If you own a home, you may be required to release any equity you may have near the end of your IVA.
Failing to comply with these rules may jeopardise the success of your IVA.
The IVA Protocol is essentially the basic code of practice that all parties involved in an IVA must adhere to. It provides the general structure through which an IVA operates and it ensures that everyone participating in it is dealt with fairly and ethically.
It details the general code of conduct in regards to several aspects of an IVA such as the content of the initial proposal, the way in which the financial situation of the debtor is examined, and the general terms and conditions of an IVA.
For a detailed breakdown of the rules involved with making sure an IVA is successful, click here.
Once your IVA is completed, it’s extremely important that you secure your IVA completion certificate.
It’s essential that you do this because after 3 months of your IVA completion, your name will be removed from the Insolvency Register and after that, the only proof you’ll have that your IVA has been completed is your IVA completion certificate.
Being in debt is a challenging situation and applying for an IVA during such a time can be quite intimidating. However, if you take it step-by-step and cooperate with your IP, you can have it set up in no time and without any added stress.
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