All the answers you may need about IVAs can be found here. Although this may help you understand more about an IVA we strongly advise that you seek qualified financial advice before entering in to any agreement. Even if it isn’t from us – but we’re here to help.
If your circumstances change, either for the better or worse, you must tell us immediately.
In helping you to pursue an IVA, your insolvency practitioner will act as Nominee and s/he is entitled to draw a Nominee’s fee for the work they do. Although this fee will be agreed with you, it is ultimately subject to approval by your creditors when they consider your IVA proposal. The fee is usually fixed and paid from realisations under your IVA. In the event your IVA is not approved by your creditors, then at the discretion of your Nominee, this fee is written off.
The Nominee fee relates to the work undertaken by the insolvency practitioner in assessing your financial circumstances and exploring all available options in determining that an IVA is a suitable solution for you. The Nominee drafts your proposal, prepares a Nominee’s report and convenes and holds a meeting of your creditors so that consideration can be given to your proposed IVA.
Subject to approval, the insolvency practitioner becomes Supervisor of your IVA. As Supervisor, their role is to monitor and collect your contributions, conduct periodic reviews of your income and expenditure, issue reports relating to the progress of your IVA, deal with creditor claims and make distributions. If necessary, s/he will also call any extraordinary meetings or report to creditors should there be any material developments (such as a windfall, a change in your circumstances, or a breach of the terms of your arrangement). Your Supervisor may seek to vary or fail the arrangement if appropriate to do so, although ultimately, it is envisaged that the Supervisor will eventually conclude your IVA.
Supervisors fees will be calculated monthly, usually as a percentage of realisations (your contributions into your IVA). This is on the assumption that the arrangement runs full term, you cooperate fully, the arrangement does not have to be varied and the creditors do not increase the amount of supervision required in your original proposals. Again, the Supervisor’s fee will be discussed with you before being subject to approval by your creditors. Just like the Nominee fee, Supervisors fees are drawn from the IVA.
In addition to fees, your insolvency practitioner will incur disbursements. These are (out of pocket) costs and expenses incurred in the setting up and administering of your IVA. Examples of disbursements are Bond (case specific insurance), postage costs, registration of the IVA and software maintenance. Some disbursements are payable in priority to fees and once again are fully disclosed in your IVA proposal, agreed with your creditors and drawn from the IVA.
It is likely that creditors will seek to set a maximum amount that can be drawn in respect of both fees and disbursements and this will be discussed with you as part of your application.
Ordinarily, creditors will permit an insolvency practitioner to draw a proportion of their fees and disbursements before commencing distributions to creditors. After any such agreed period ends, realisations are apportioned between fees and creditor distributions, with dividends to your creditors being paid monthly.
An IVA will stay on your report for six years once you enter it. This will affect any future applications for credit while it stays on your credit report and may have long term effects if you are asked to disclose any previous insolvency periods when applying for future credit.
An IVA normally lasts for five years. When coming towards the end of an IVA, as a homeowner, you may be asked to release the equity in your property by remortgaging. If you unable to re-mortgage, your IVA may be extended by 12 months.
Debts excluded from an IVA include, but are not limited to the following:
- Child Maintenance arrears
- Mortgage and mortgage arrears
- Secured loans
- Car finance while you still own the vehicle
- Rent arrears
- Court fines
- Student loans
- Utility bills with any current provider
Any of your creditors, whose debts are to be included in the IVA, will be told that you making a proposal to enter into an arrangement. If it is agreed they are bound by the terms of the IVA. Any communication is also handled through us with the exception of any obligatory announcements and key statements.
Yes, you can cancel the IVA, however creditors may then commence alternative recovery action such as bankruptcy. An IVA is a legal process. Once it is set up it cannot be cancelled simply because you have changed your mind. However, if your circumstances change and you can no longer afford the repayments then your IVA may be terminated. Should the IVA be terminated creditors may backdate interest to the approval date of the IVA.
We have dedicated staff who will deal with the closure of your IVA at the end of its term, issuing a final report to your creditors and sending a Certificate of Completion. You may then send this to the credit reference agencies as evidence that you have successfully completed your IVA.
The terms of the arrangement are that on each anniversary of the arrangement a review is completed. This to ensure that your payments are set at an affordable amount.
Approximately 8 weeks before your review is due we will send you a reminder and then a form to complete. Please complete the form and send with your wage slips for the last 12 months. We also need your last 3 months bank statements and any benefit statements.
As well as wage slips, bank statements and proof of any benefit payments we also need copies of your most recent accounts and tax return.
This is so we can check your outgoings such as utility bills and insurance payments, etc.
If you have mislaid any wage slips, please provide the bank statement showing the money being credited to your account instead.
We ask for your P60 so that we can see your total earnings for the year. If any wage slips are missing we can work out what you got paid, but if you can’t provide your P60 don’t worry.
We work to guideline figures issued by Step Change that determine what’s acceptable as part of general expenditure and these have been approved by your creditors. We are here to help so if you disagree with any of the figures, please contact the administrator name that is given on your letter.
The terms of your IVA state that you can earn 10% more than the income your payments are set on in overtime/bonus. If you exceed this 50% of the surplus is due into the IVA. Once we have received your wage slips we calculate how much is due in total for the year. We will write to you to ask you to pay this money in, but don’t worry if you don’t have it in a lump sum, we can set a monthly arrangement to pay it in.
It depends on what you had to pay out for, send in as much supporting evidence (e.g. invoices/receipts) so that we can decide if the expenditure can be offset against any money due.
We assess your income and expenditure as a whole, so if your outgoings have increased too it may mean that your payments do not increase.
We assess the percentage split of your incomes so that we can split the expenditure on the same basis. If you do not supply this information we will split the expenditure 50/50 which may not be fair to you or your partner.
You can read more about the next steps and other useful information in your Welcome booklet – this can be viewed on mobile, tablet and desktop.
Our guide can help explain the different options to deal with your debt problems. Read this below on mobile, tablet and desktop.