Let’s take the needed documents step by step! First, you will need to provide an honest image of your current financial circumstances. This will help your Insolvency Practitioner to decide whether an IVA is the best option for you or not. For this decision you are required to gather at least the following information: the unsecured debt you owe, your stable income, your primary expenses and your secured debt. If both your Nominee and you agree, an IVA proposal can be prepared.

Here we provide you a list with the required documentation besides the information forms you needed before. So the following documentation you will need in order to make a proposal to your creditors: Property Valuation, Mortgage Statement, Endowment Policy Surrender Value, Car Finance, your Salary (this means providing payslips for at least three consecutive months), and Creditor Statements (that contain the amount you owe to each creditor, and the particular account numbers). Next, you also need to provide creditors reasons for financial difficulties, as without this they will not accept an IVA. This means providing them a detailed personal history that explains how you have arrived at your present financial situation. These have to be identifiable reasons such as unemployment, decrease of your income, illness, or something similar in order for your creditors to agree with your new repayment proposal.

Your Insolvency Practitioner will draw up a repayment plan based on this documentation and on how much you can afford to pay realistically each month. Next, this formal written proposal is sent to your unsecured creditors, so they have the chance to see how much their return would be through an IVA. Your licensed representative will also provide them the following documents: the proposal, the exact date, time and place of the Creditors’ Meeting where creditors will decide whether to accept or reject the IVA. The Nominee will also give them a Statement of Affairs which contains a list of the assets and the total debt of the debtor, a list of creditors, the fees charged by the Nominee in case of making a successful IVA, as well as a paper for voting purposes. Finally, a so-called Creditors' Meeting is being held, where creditors can vote either for or against the IVA, and they also have the chance to ask for modifications. If the majority of the creditors who are present vote for it, the IVA can officially start. It is worth noting that from this point on all of your creditors are legally bound by it, even those who voted against it, or who were not present at the meeting. And when the IVA is over, you will finally be debt free!

Let’s move on to the costs of setting up and running an IVA. You should know that the main reason why this option is so popular both for the creditors and the debtors is that its costs are considerably lower than the court costs and the other fees in case of a bankruptcy. Basically, you will have two types of fees: the Nominee’s fee for preparing your IVA and making the proposal and the Supervisor’s fee. Supervising an IVA means monitoring your monthly contributions, the disposal of your assets and the requirements’ of the creditors. The Nominee’s fee is about £2,500 in most of the cases, while the annual Supervisor’s fee is around £1,000. In total, an IVA usually costs about £7,500. This is the reason why an IVA is not for those with small debts. However the charges are usually not paid by you, instead they are deducted from the amount that you agree you pay monthly. This means you do not have extra costs besides the agreed monthly payments. But be cautious when choosing the Nominee, as they have different ways of charging fees. Make sure you understand how and how much he or she charges you for the arrangement. There are also companies who provide free consultations prior to accepting an IVA, so take advantage of this!

Please remember that the most important in this process is to approach cautiously! The key advice for you if you consider an IVA is to make professional assessments early, and examine or talk to at least three companies before choosing one! It is essential that you have a licensed expert who can legally deal with your case and will monitor the whole process, including the needed documentation. Don’t forget that a reputable insolvency practitioner does not charge for initial advice. Finally note that although an IVA costs you less, it is worse to agree to an unrealistic or unaffordable deal than choosing bankruptcy! So accept an IVA only if it is realistic! All in all, be careful, analyse your case, your costs and your chances attentively! And if it’s possible, choose an IVA that will surely make you debt-free!