When you plan to apply for an Individual Voluntary Arrangement (IVA), the very first thing that you should look for is a certified Insolvency Practitioner (IP). Since you cannot start an IVA yourself, you need a designated IP to manage your debts. They are the chief focal who deals with your IVA from application to end.
The IP has many roles to undertake for your debt management. When you apply for an IVA, the IVA provider, say StepChange debt charity, will assign an IP for you. The Insolvency Practitioner is usually the licensed solicitor or accountant eligible to practice insolvency services.
They are typically regulated by various official and authorised professional bodies like the Institute of Chartered Accountants in England and Wales (ICAEW), Association of Chartered Certified Accountants (ACCA), Insolvency Practitioners Association (IPA), and Institute of Chartered Accountants in Scotland (ICAS). The IVA provider hires the IPs from such professional bodies.
Without further ado, below are a few significant ways an Insolvency Practitioner helps you in debt management and handling your IVA. You can also learn about the various roles that an IP undertakes while managing your IVA.
The IP helps you determine if an IVA is the right debt solution for you.
You should apply for any debt solution if you are sure that it is the right choice for you to write off your debts. The task of an Insolvency Practitioner in an IVA is to assess your situation and obligations, then tell you why or why not an IVA is the right debt management option for you. If not, they will recommend some other suitable alternative. If you choose to go ahead and apply for an IVA, the IP now acts as your Nominee. Stepchange review is an excellent resource to know more about IP and IVA assessment.
The IP drafts your IVA proposal.
Since you have decided to go with an IVA for your debt management plan, you must now provide all the crucial financial documents and other debt information to the IP. They will now ascertain your finances to work out a regular debt repayment amount and draft a suitable IVA proposal considering your situation.
An IVA proposal is a formal contract, so the IP must cautiously draft its terms and conditions. It is to be done so that the IVA proposal is fair to all the parties involved. If you cannot afford to make the stipulated monthly repayment, you should ask the Insolvency Practitioner to change it. StepChange reviews show that the IP must make the IVA proposal satisfactory to make it a successful agreement.
The IP deals with your creditors as your representative.
After verifying the IVA proposal with you, the Insolvency Practitioner now arranges a creditors meeting to get approval for the IVA proposal. If the creditors want some changes in the IVA proposal, the IP agrees to do so only if it does not harm your IVA benefits. More than 75% of the creditors (concerning total debt value) must vote for the debt repayment plan to consider the IVA proposal as approved.
If the IVA proposal gets approval from the majority of the creditors, you should no longer stay in contact with them. Any matters related to the creditors are the responsibility of the IP as the IVA comes into effect.
The IP manages your payments made into the IVA.
If the creditors agree to the IVA proposal, it indicates that the court, too, will approve your IVA. When your IVA commences, the Insolvency Practitioner will now act as the IVA Supervisor to manage your IVA agreement. Till the IVA lasts, the IP will monitor the monthly IVA contributions made to cover the debts. It is better not to default in making these regular debt repayments.
While not usual, the monthly IVA contributions often include the fees and costs incurred while setting up your IVA and for the IVA debt management plan. Even if additional IVA costs are involved, it does not go out of your funds. It is deducted from the monthly IVA contributions to be forwarded to the creditors.
The IP holds annual reviews of your IVA.
As an IVA Supervisor, an Insolvency Practitioner also has the responsibility to conduct yearly IVA reviews. This activity helps determine any changes in your financial situation and your capacity to make the monthly IVA contributions. Your bank statements, expenditures, and other financial affairs are ascertained to find the financial position that you are in. any type of change in your situation could increase or decrease the IVA repayment plan. If any IVA term is breached, the IP can even fail your IVA.
An Insolvency Practitioner undertakes different roles during the IVA term are as an IVA Nominee and as an IVA Supervisor.
Role of IP as the IVA Nominee
The Insolvency Practitioner undertakes the role of IVA Nominee after you finally decide to enter into an IVA. Since then, the IP will act on your behalf throughout the IVA term. As IVA Nominee, their duty is to assess your financial situation and debts to work out the monthly debt payment value and draft your IVA proposal. After that, they meet with the creditors to get their approval on the IVA proposal. As your IVA gets approval from both creditors and the court, it becomes legally binding for all the parties involved.
Role of IP as the IVA Supervisor
When your IVA agreement comes into motion, the role of Insolvency Practitioner changes from IVA Nominee to IVA Supervisor. From this point onwards, the IP acts as the IVA administrator. They have to monitor if the monthly IVA contributions are made on time. Suppose the creditors are acting out of the terms of the IVA. They are also bound to hold yearly IVA reviews to assess the IVA payments and your financial situation.
If they find any breach of IVA terms during the annual IVA reviews, they can cancel your IVA. Note that a cancelled IVA on your credit report would badly harm your credit score for a long time. So, make sure you abide by the IVA terms as stated and avoid court hearings.
Nonetheless, entering into an IVA is the best option you can get if you want to write off your debts within four to six years at most. And with the assistance of Insolvency Practitioners, IVA debt management becomes more straightforward.
For More Info related to IVA , You can dial Step Change Phone number to get all related debt queries.