IVA Help

IVA help and IVA advice

IVA Help - How long could it take?

IVA Help

No one IVA is the same and the time they can take varies. However, the quicker that we receive information from you each time it is requested, the more quickly we will be able to move. We want you to get the certainty of an IVA as soon as you can.

A rough guide to time involved to arrange an IVA

• The ClearDebt Analyser: around 2 minutes
  
• Detailed Financial Healthcheck: between 30 mins to 1 hour
  (Use the checklists at the beginning to gather together information you will need before starting to answer the questions).
  
• You will receive your Personalised ClearDebt report within 4 working days of completing the ClearDebt Financial Healthcheck.

Our report will ask you to send back confirmation of the details you have provided together with credit card statements, payslips, etc detailing this. You will also be asked to complete a small number of simple additional questions – We will move your case forward as soon as we receive this back from you.

Once ClearDebt has all the information we need we will arrange for you to meet the Insolvency Practitioner (or their representative) - this is a legal requirement. Before you actually meet ClearDebt you will be sent a copy of the draft IVA proposal for you to review and comment on.

Once you are happy with your IVA proposal and after you have met ClearDebt and signed the IVA proposal, the documentation will be sent by ClearDebt to the creditors and the court (this is merely a formality unless an interim order is required.).

There will be a minimum of 14 days and a maximum of 28 days between the documentation being circulated and a meeting of creditors being held. It is at this meeting that the creditors decide whether or not they agree to your IVA proposal. The arrangement is passed if 75% of your creditors, (measured by the value of their debt) who vote agree.

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IVA Help - What information do I need to arrange an IVA?

IVA Help

To arrange an IVA, your proposal for an individual voluntary arrangement (IVA) must be a full and true account of your current financial situation.

You will need to provide:

• The name and contact details for all companies, organisations and individuals that you owe money to - and the amount that is owed.
  
• Details of your monthly income and spending (Cleardebt wants to make sure we put forward an arrangement you can genuinely afford).
  
• Information about your house, including its value and any mortgage. You must state who your mortgage provider is and the amount of your mortgage (unlike bankruptcy, you will not be forced to sell your house in an IVA).
  
• Information about any loans that are secured on your home.
  
• Details of any assets of significant value, which may be of interest to your creditors. (Unlike bankruptcy, it's up to you what you decide to keep or to sell to meet your debts; but your creditors may be more inclined to support your IVA arrangement if you sell the Roller and buy a Ford instead.

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IVA Help - Insolvency Practitioner

IVA Help

Licensed insolvency practitioners (IPs) are the only professionals allowed to use insolvency procedures backed by law to help people and companies who have debt problems. Often, but not always, the insolvency practitioners is a Chartered Accountant or a solicitor. And, all insolvency practitioners are regulated by a professional body that demands high standards of ethics and performance – and to whom you can complain if dissatisfied.

If you decide to consider a ClearDebt IVA as your route out of debt, our insolvency practitioner's first task will be to assess whether an IVA is a realistic and achieveable option for you. The insolvency practitioner has a professional responsibility to give the best financial advice: if an IVA is not a good option they will say so and recommend an alternative.

Once you have decided, with the insolvency practitioner's advice, to propose an IVA, the insolvency practitioner then has a responsibility to both you and the creditors who are owed money.

In every case, the insolvency practitioner must consider what the individual can honestly afford to pay each month and take all reasonable steps to ensure that the information they give is true and accurate. The insolvency practitioner will require the individual to make a full and true statement of their current financial position. If the individual does not do so the insolvency practitioner may refuse to continue to act on their behalf. If the insolvency practitioner finds that false information has been given once the IVA proposals have been agreed, the IVA may fail.

After the individual’s creditors have agreed to an IVA, the insolvency practitioner has a responsibility to make sure that the individual complies with its terms. If the monthly payments are not made on time, or if the individual does not comply with the reasonable requests of the insolvency practitioner, then the creditors will be told.

In saying all of that, our insolvency practitioner's have many years of experience in dealing with people and families who have debt problems. Almost no situation is new to them and there is almost always a solution that can be found to help you become debt free.

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IVA Help - What will happen to my home in an IVA?

IVA help

Your home may or may not be included in the IVA proposal. This will determined by your circumstances.

If you do not have more than £5,000 of equity in your home (the amount left after your mortgage and other secured creditors have been paid when the house is sold) then it is unlikely the house will be included in your IVA.

However, if you have a large amount of equity, your creditors may ask for your share of it to be included. If you own your property jointly, with your wife for example, then your share would be half of any equity.

You would normally arrange to contribute your share by re-mortgaging your property during the course of the IVA, usually near the end. The advantage of an IVA is that you may have several years to arrange this whereas in bankruptcy you would be allowed a maximum of 12 months to do so – before being forced to sell your home to make the contribution.

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IVA Help - What will happen to my assets in an IVA?

IVA Help

You must disclose all of your liabilities (debts) and assets to the insolvency practitioner (IP) acting as your nominee.

If you have an asset, such as a valuable antique, or a luxury car, you may be strongly advised to include this as part of the offer that you make to your creditors. There are a number of reasons for this:

1) If you were made bankrupt, such an item would automatically be required to be sold by the Official Receiver. Creditors are unlikely to approve your IVA unless it gives them a better return than in bankruptcy.. If valuable assets are excluded from the IVA then this might not be possible.

2) You are legally required to make a full and honest disclosure of all your assets. If a creditor sees that you have a luxury item that you are not prepared to include and do not have a good reason (for example sentimental value ) then they may not support such a proposal.

Remember if you do not tell your creditors that you have a valuable asset when they agree your IVA they could ask the Court to cancel it subsequently.

However, everybody’s circumstances are different. If you are at all concerned about this issue, one of our advisors will be happy to give you more information.

You can email us at: enquiries@cleardebt.co.uk and we will reply promptly or call you back if you leave a contact number.

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IVA Help - Secured loan or mortgage?

IVA Help

You may have loans that are secured on your home. The most common will be “homeowner loans” or “ debt consolidation loans” which you may have used to pay off other debts in full, in exchange for one monthly payment.

These loans may seem a solution to the demands of lots of different creditors requiring monthly payment - but your house is at risk if you are unable to keep up with your monthly repayments. This could prove challenging and stressful if you aren’t quite making ends meet every month.

The "security" that the loan company takes over your property is like the mortgage that you will have with your bank or building society. The loan company has a legal guarantee that ensures that, in the event you do not make the required payments, they can demand you sell your house to pay back the loan. So, they are unlikely to agree to compromise this by agreeing to an IVA. Put simply, in almost all cases, an IVA will not involve large secured debts.

If you have a secured loan and you have also built up a number of other debts you cannot pay on time or in full, you may be able to put an IVA together that deals with the unsecured debts. You will need to keep making the monthly payments on your secured loan whilst also making your monthly IVA contributions if you want to keep your home.

Queries about anything discussed so far? Please click here to email your question to our financial advisors.

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Links to related ClearDebt articles:

Individual Voluntary Arrangement (IVA)
Debt forgiven with an IVA
ClearDebt debt survey gives regional, gender and age context for upcoming Government insolvency statistics
Young women IVA seekers have greater debts
People with debt problems are more prepared to cut their children’s activities than to give up smoking
ClearDebt welcomes insolvency watchdog’s proposals on IVAs
CLEARDEBT SURVEY SHEDS LIGHT ON DTI INSOLVENCY FIGURES
IVA alternative to bankruptcy misconception
ClearDebt comments on Latest IVA Figures
ClearDebt clarifies IVA process
IVA Rejected but Arranged Structured Repayment Plan to get Finances on Track
Debts cut by 61% - saving £600 a month with an IVA
IVA is not always the right choice
Clear debt with an IVA - and starting life again
Your money or your job
IVA slashed monthly payments to £300 - from more than £2,000
Divorce/separation can change your financial life
IVA after wage drop and debts spiralling.
IVA Advice and IVA Help
IVA Advice - Guide to arrange an IVA
IVA Advice - Northern Ireland
IVA Advice - What is the Cost of an IVA?
IVA Advice – Being eligible for an IVA?
IVA Advice – IVA Facts and advantages over bankruptcy
IVA Advice – IVA Facts and disadvantages
IVA Help - How long could it take?
IVA Help - Insolvency Practitioner
IVA Help - Secured loan or mortgage?
IVA Help - What will happen to my assets in an IVA?
IVA Help - What will happen to my home in an IVA?
IVA Help - What information do I need to arrange an IVA?

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