FREQUENTLY ASKED QUESTIONS – INDIVIDUAL VOLUNTARY ARRANGEMENTS
1. Will I lose my home?
Usually in an Individual Voluntary Arrangement the debtor is allowed to keep his house and continue to pay the mortgage. In some instances the creditors may require you to sell or re-mortgage the property and contribute all or some of the funds into the Individual Voluntary arrangement.
2. Will the Individual Voluntary Arrangement be advertised?
No. Although a bankruptcy order must be advertised, this is not required in an Individual Voluntary Arrangement.
3. Will my employer be informed?
No. The supervisors of your Voluntary Arrangement will not contact your employer unless required to do so under the terms of the Arrangement. If your employers are amongst your creditors, they will of course be notified.
4. What will happen to my pension in an IVA?
It depends on the type of pension that you have. Usually, where you are an employee contributing to your employers pension scheme, the creditors will allow you to continue to make contributions to that. If you have a personal pension, then the creditors may insist that all further contributions are frozen for the duration of the Voluntary Arrangement.
5. Where will the Voluntary Arrangement creditors meeting take place?
This is held at a place convenient for the creditors. We usually hold creditors meetings at our offices in Altrincham, which is central and convenient for those involved. We have found that over the last few years it is extremely rare [in cases of consumer rather than trade debt] for any creditors to attend these meetings.
6. How long does it take for the IVA proposal to be prepared?
We expect to have a Proposal prepared and returned to you within ten working days of receiving complete answers to the questionnaire we will send you. Delays can occur if the information requested is not forwarded to us, or is not complete.
7. Will my creditors agree to an IVA?
In order to be accepted for an IVA, 75% of your creditors in value have to vote in favour of it.
8. I would rather certain creditors were not informed of the Proposal and kept out of the Individual Voluntary Arrangement
The Nominee must send a copy of the Proposal to all known creditors. If a creditor is to be excluded details must be given in the Proposal and the creditor must agree.
9. When will the meeting of creditors take place?
The meeting will be called for a date approximately four to six weeks from when you return the duly signed Proposal to us. We are required to give creditors not less than 14 days, but no more than 28 days notice of the meeting.
10. How are the Nominees’ and Supervisors’ fees paid?
The Nominees’ and Supervisors’ fees are paid out of the contributions you make into the Individual Voluntary Arrangement. Generally you do not have to pay any of these fees in advance.
11. Do I have to pay any additional fees/expenses?
No.All fees and disbursements, upon the agreement of creditors, are paid from the Arrangement.
12. What happens if my monthly bills increase, or there is a change in my financial circumstances?
The Supervisors will monitor the level of your income and expenditure throughout the duration of the Voluntary Arrangement. Such reviews are usually made every six or twelve months and are generally determined in your Proposal.
13. What if I lose my job or there is a dramatic change in my circumstances?
There is a provision in the Voluntary Arrangement to call a further meeting of creditors if this proves necessary. In previous cases, where somebody has been made redundant or has become seriously ill, we have managed to persuade creditors to either extend the period of the Voluntary Arrangement or, in exceptional circumstances, consider the Voluntary Arrangement complete. The important thing is that you tell us as soon as possible when there is a change of circumstances in order that we can do something about it quickly.
14. Will creditors allow pet insurance/vet bills as part of my regular monthly expenditure?
Yes. Creditors generally accept this as part of your normal household expenditure.
15. Can creditors pursue me for the balance of debts after the IVA has finished?
No. The purpose of the Individual Voluntary Arrangement is to ensure all known creditors are bound by a full and final settlement.
16. Will I be allowed to keep subscribing to Sky TV?
Yes. Creditors generally accept this as part of your normal expenditure, although the level of subscription could be capped if creditors believe payments are excessive.
17. I have a car on finance. What will happen to it? Will the finance company re-possess it?
In most cases, your creditors will allow you to keep a car where it is essential, for example, to get you to and from your place of work. We will include in the Proposal a provision that you will continue to pay the finance company their normal monthly instalments. In most cases the finance company will not re-possess the car and will continue to collect the outstanding monthly payments.
18. Will my credit rating be affected?
Yes. All of the major credit agencies get a monthly update of all IVA’s. They keep a record of the IVA for at least 6 years from when it commenced.