We've answered your questions about IVAs and Creditors, from how many creditors you need to qualify for an IVA to looking at why creditors agree to IVAs, read on for the answers.
If you have any additional IVA questions which have not been answered below, you can ask the ClearDebt Community at the bottom of the page.
The questions can be categorised by the following:
Facts you need to know about how an IVA works
Benefits that will help ease the current pressures you may be feeling whilst trying to pay back your debt
Be aware of important issues which may affect your relationship with creditors, pending court action, your credit rating and lifestyle.
No. Once the IVA arrangement has been agreed your creditors are bound by the terms and, as long as you maintain your obligations (ie, keep up the payments and tell your supervisor if your circumstances change), they cannot take further action against you or demand a higher repayment from you.
Two - but with at least three lines of credit. An overdraft and credit card with the same bank are normally considered to be a single creditor, despite being two debts, so in this or a similar scenario you would need another separate creditor. It's important to be aware that many creditors operate under several brand names. For example, the Cahoot brand is part of Santander.
Only one. However, usually creditors do not attend the meeting, they vote by proxy, (meaning they register their vote without being there). Only one proxy is therefore required. A proxy is a person or agent nominated to act on behalf of an organisation. 75% by value of the creditors registering to vote will need to vote in favour for the IVA to pass. More than nine out of ten of the IVAs we propose are passed.
During late 2006 and early 2007, there was growing resistance to IVAs from some creditors which was blocking many fair proposals. It was their view that some IVA providers were misleading consumers about the suitability of IVAs. This issue was resolved in February 2008 when a code of conduct was agreed between the IVA providers and the bodies who regulate them. This became known as the IVA Protocol. The vast majority of creditors are now fully supportive of IVAs and with minor exceptions will, in the majority of cases, vote in favour of a well constructed proposal based on affordability.
Should you go bankrupt, it's unlikely a creditor will receive any of the money owed to him. Although an IVA does not give a creditor a full return on the debt owed, it does guarantees a percentage back therefore making it a more favourable option.
Your Advisor or Nominee will write to the court and the creditors concerned on your behalf. Further steps can be taken if necessary by way of an application for an Interim Order.