If you`re considering entering into an IVA (Individual Voluntary Arrangement) and your Insolvency Practitioner (IP) agrees that it`s the right option for you, one of the first things you`ll need to do is work with your IP to draw up your IVA proposal.
Your IVA proposal is a document that must be sent to all of your lenders, detailing the terms of your IVA. Your lenders must then consider whether to approve the terms.
The IVA proposal must include details of all your existing debts, including credit cards.
The aim of an IVA proposal is to inform your lenders of your overall financial position, as well as what you can realistically be expected to contribute towards your debts. So, an IVA proposal will include details of things like:
Using this information, your IP can provide your lenders with a clear picture of your situation, and this should demonstrate why an IVA is the right option for both you and your lenders.
Once your lenders have been sent the IVA proposal, they`ll be given at least 14 days to consider the terms, and in this time they will be able to `vote` for or against your IVA - or they could propose some amendments to it.
At the end of the given period, the `creditors meeting` will take place. In reality, the creditors meeting is not so much an actual meeting, but a period of time in which you and your IP will make yourselves available to discuss any questions or queries your lenders may have.
The meeting will close and your IP will assess whether sufficient support has been received (approval by 75% of all voting lenders) for your IVA to go ahead. If your IVA proposal is rejected, you can either attempt to negotiate further, or opt for an alternative debt solution.
If the IVA proposal is accepted, your IVA can begin. A typical IVA will involve making regular monthly payments for five years (although these timescales can vary). On successful completion of these terms, you`ll be legally debt free.
But remember: an IVA is a significant financial commitment that will have a big impact on your credit rating. As such, you should only enter into an IVA if you are certain it is the right option in your circumstances.
For more information on IVAs and other debt solutions, click here or call one of our expert debt advisers on 0800 195 2911.
Answer a few simple questions and we'll give you an instant recommendation on your best way out of debt.
Your privacy is important to us. All correspondence is held in the strictest of confidence and we will only request information required to find your best debt solution.Related resources:
Tags: iva, credit card, credit card debt, iva debt, iva credit card debt, credit card debt iva, include, what debt, types of debt, credit, store card, iva proposal, proposal
Fees payable when continuing service is provided. Repaying debt over a longer period may increase the total amount to be repaid. Calls are recorded and are usually free from UK landlines. Mobile phone users may be charged and should check with their service provider.
Think Money Limited © 2010. All rights reserved. Pennington House, Carolina Way, South Langworthy Road, Salford Quays M50 2ZY. Company Reg No: 04926097. Registered in England and Wales.