If you are aware of Individual Voluntary Arrangements (IVA's) and want to understand how the basic IVA process actually works then the following guide works for most forms of IVA.
The IVA process can generally be split into two distinct areas "Nominee" and "Supervisor".
"Nominee" IVA Process
The Nominee part of the IVA process covers everything which happens with your case all the way up to being approved by creditors and probably goes along the following lines.
- An initial discussion or IVA Fact Find will take place to determine the status of your debt problems and whether you actually qualify for an IVA or not.
- If the Fact Find determines that you do qualify for an IVA then the IVA Company will send out some basic documentation, usually including an Authority to Act (allowing the IVA Company to work on your behalf).
- Once you have completed and returned the initial documentation then the IVA Company will have a further discussion with you to gain complete understanding of your case. This further research aims to allow the case to be proposed to creditors in the best possible light.
- The IVA Company will also approach creditors where necessary to obtain up to date balances on all of your unsecured credit.
- Once all of the required documentation has been gathered and researched to reinforce your case then an IVA Proposal will be produced. The IVA Proposal is the basic legal document which – if approved by creditors – forms your IVA contract.
- The IVA Proposal is signed by you as a true and accurate reflection of your financial affairs and is then distributed to creditors for review, comment and hopefully approval.
- A Creditors Meeting is called, the date usually being 15 days after the distribution of the IVA Proposal. For many of the people we deal with in putting together an IVA, the Creditors Meeting is perceived to be the worst part of the process. However in reality this "meeting" is a misnomer. In the vast majority of cases the Creditors Meeting is conducted by telephone and fax and no actual meeting takes place.
- The result of the Creditors Meeting is then communicated to the debtor. An IVA "Chairman's Report" is formally sent to the debtor within seven days to confirm the outcome of the Creditors Meeting and – if the IVA is accepted – the IVA commences.
"Supervisor" IVA Process
Once the IVA has been approved the case then moves over to the Supervisory or Post Appointment part of the IVA Company. The case will be allocated to someone who will then be your main point of contact throughout the period of the IVA.
- The Supervisor is responsible for acting as liaison in the IVA process between you and your creditors. A minimum of an annual review should take place for every IVA. During the annual review the Supervisor must check to see whether your material financial circumstances have changed. For instance if you are earning significantly more income then the Supervisor will want some of that money to increase the return to creditors.
- One of the Supervisors other roles is to inform the creditors if the terms of the IVA are not being adhered to. In the event that a significant change in your circumstances occurs then the Supervisor can recommend the creditors accept an IVA "Variation Order" to change the material terms of your IVA. However if you fail to maintain the terms of your IVA – principally a failure to make the IVA payments – then the supervisor should seek to terminate the IVA and recommend commencement of bankruptcy proceedings to the creditors.
The average period of an Individual Voluntary Arrangement is five years (IVA Payments). Many things can happen during that period of time to affect the smooth running of an IVA. If you are already in an IVA and are experiencing any difficulty, or are unsure of certain elements of your IVA contract, then you should contact your IVA Supervisor immediately for advice. If you are thinking about an IVA as the solution to your debt problems then you should be aware that these contracts should not be lightly entered into.