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Questions asked regularly and interesting questions asked elsewhere on Beat My Debt are posted here for the benefit of all.
By Beat My Debt
#685
In order to undertake an IVA, there are a number of steps that need to be followed. These are outlined below:

Step 1.

You need to undertake a review of your entire financial situation and work out your reasonable disposable income and whether you can release any equity from your property. You will normally get help to do this from a Debt Management company or Insolvency Practitioner. You record all of this information within a Statement of Affairs document. The information you provide will have to be supported with documentation.

Step 2.

A Licensed Insolvency Practitioner (IP) will review your situation and must be convinced that your undertaking an IVA is in the best interests of your creditors, that there is a clear advantage for your creditors over bankruptcy and that you are doing the very best you can.

Step 3.

The IP will carry out a meeting with you either on the telephone or face to face. Once both you and they are happy that you understand your IVA and what it will mean, the IP will prepare a draft IVA proposal on your behalf. You will be asked to sign this proposal.

Step 4.

Each of your creditors is sent a copy of your IVA proposal. They will be given a minimum of two weeks to consider it. They may accept it, accept it with modifications or reject it. No modification of your proposal will be accepted without your agreement.

Step 5.

At the end of the two week period, a creditor’s meeting is held. The meeting is chaired by the Insolvency Practitioner. You will not normally be required to attend this meeting although you can do so if you wish. Normally your creditors will choose not to attend and vote by proxy (in writing by post). If creditors representing 75% of the total value of your debt agree to your proposal, it will then be binding on all of your creditors. All creditors must then freeze interest and additional charges.

Step 6.

The IVA is registered at your local County Court and the IP is normally appointed as the Supervisor of the Arrangement. They will monitor your monthly payments, supervise the disposal of any assets and fulfil any other requirements as agreed in your IVA.

Step 7.

Once you have met all the terms of your IVA including making all necessary monthly payments (normally over 5 years) and releasing any equity from your property as required, you will then have settled your debt in full. Any outstanding debt will be written off under the law and you will be left debt free to turn over a new leaf.