IVA Process

How do Individual Voluntary Arrangements work?

If you're suffering from serious debt problems then you may be eligible to apply for an Individual Voluntary Arrangement (IVA).

An IVA is a legally binding agreement to restructure your unsecured debt repayments. Your debts are restructured into a single payment made each month for a fixed period of time. At the end of this period, usually 5 years, any remaining unpaid debt is written off.

The process for setting up and managing an IVA can be divided into two areas - the Nominee stage and the Supervisor stage.

IVA Process - Nominee Stage
Individual Voluntary Arrangements begin with the Nominee stage. This covers everything that happens up to the IVA being agreed between yourself and your creditors. Although IVAs will vary typically the Nominee process will work as follows -

  • Speaking to a trained debt counsellor to determine if you qualify for an IVA and if it is the best solution to your debt problems.
  • Completing an Authority to Act document giving the debt company and Insolvency Practitioner permission to work on your behalf.
  • The Insolvency Practitioner gathers all the information necessary to produce an IVA Proposal. This proposal is a basic legal document that puts forward your case to your creditors.
  • A Creditors Meeting is called in which your creditors vote to either approve or refuse the IVA Proposal. In reality this will most likely be done over the phone or by email rather than in person.
  • An IVA Chairman's Report is sent to you confirming the result of the Creditors Meeting. If 75% (by value of debt) of your creditors approve then the IVA is confirmed and can proceed.

IVA Process - Supervisory Stage
The Supervisory stage of the IVA process covers everything that happens from your IVA being accepted through to its completion. Someone entering an Individual Voluntary Arrangement will be allocated a person to be their point of contact for the duration of the agreement. This IVA Supervisor has a number of responsibilities -

  • The Supervisor will act as a liaison between you and your creditors. At least once a year they will conduct a review of your arrangement. The purpose of the IVA review is to check if your financial situation has changed.
  • If your financial circumstances have changed then the Supervisor can recommend an IVA Variation Order. This Variation Order will change the IVA to suit your new situation.
  • In cases where the IVA isn't being followed then the Supervisor can look to terminate the agreement. Typically this will happen if you fail to keep up with the agreed repayments.

Find out more about the IVA Process

Royal Exchange can advise you on all aspects of the IVA Process and Individual Voluntary Arrangements in general. We incorporate debt counsellors and Insolvency Practitioners and so we are able to manage every stage of your IVA.

To find out if you qualify for an IVA please use our online debt calculator.

For more information call our debt helpline on 0800 028 4422 or complete our enquiry form and we will call you back.