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An IVA is an alternative to bankruptcy. Basically it is a legally binding agreement between you and your creditors. The terms of your proposal to creditors may be very flexible, but creditors will reasonably expect their prospects of recovering money to be at least as good as in a bankruptcy. Further, they will expect the proposal to contain sanctions (such as a right to bankrupt you) if you do not fulfill the terms of your proposal.
Typically in order to qualify for an IVA You (the Debtor) must be assessed and deemed “insolvent”. This means the unsecured debts you hold are greater than your assets and you are unable to meet your debts as they fall due.
An IVA is more than often a better option than bankruptcy, due to being able to protect assets such as your home. It can also help to avoid the publicity associated with becoming bankrupt. Creditors will also look more favourably at an IVA, as bankruptcy may mean they receive less money.
Anyone who lives in England, Wales or Northern Ireland who has total debts of more than £15,000, owed to more than 3 creditors, who is struggling to afford their monthly debt repayments, could qualify for an IVA. They should also be employed, self employed, or at least not have an income solely dependent on benefits. This information is a guideline only and every case is different and ultimately the decision will lie with the creditors voting committee on whether to accept any proposal.
In addition to the standard monthly contribution IVA, there is a possibility to propose a lump sum IVA to creditors. This could be a sum of money derived from a sale of an asset or from a family member. Which will satisfy creditors in one payment rather than 60 monthly contributions? This option is sometimes the only option available to debtors.
Your proposal will be voted on by your creditors representatives at a (creditors meeting). If over 75% by value of your creditors who are represented at the meeting (in person or by proxy) vote in favour, the IVA will be agreed.
If you comply with all the terms of your IVA then you will no longer be liable for any remaining debt at the end of the agreed term.
Think Financial Solutions refers IVA cases to insolvency practitioners McAlister & Co and Grant Thornton. We refer to the above two companies as they have a reputation for high professional standards and previous clients have provided positive feedback upon their services.
Where a client makes a decision to use either of the above Insolvency Practitioners to propose an IVA, part of the nominee fee charged will be paid to Think Financial Solutions. The typical fee we earn is 50% of the nominee fee which equates to approximately £500 - £1000 per IVA.
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