How an IVA is Managed

how an IVA is managed

Once an IVA has been formally agreed by your creditors then it becomes legally binding on all parties concerned, although that’s certainly not to suggest that it can’t be amended going forward.

Once the terms of your IVA have been agreed with your creditors the Court will appoint your chosen insolvency practitioner to become the supervisor of the IVA.  It is then his or her responsibility to ensure that all payments are made to your creditors in a timely manner and that all obligations under the IVA are properly fulfilled.

Throughout the duration of the IVA you must ensure that payments are made to your chosen advisor on time and in the event you find yourself struggling to make payments then you must advise them of this as soon as possible.  Communication is key.  By engaging positively with your creditors throughout the IVA then you’ll more likely reach a suitable outcome and most importantly, start to rebuild your financial future in a more positive light.

What to do if your circumstances change

Sometimes circumstances change – for the better, or even the worse.  Typical examples of change can include:

  • Receiving unexpected funds (such as a successful compensation claim or inheritance)
  • An increase or decrease in salary
  • Redundancy or other reasons for unemployment
  • Finding out about an additional debt that you weren’t previously aware of (sometimes referred to as an ‘unknown creditor’)

Provided that you speak with your advisor as soon as possible then there’s no reason why they shouldn’t be able to vary your IVA to take account of any changes you might encounter throughout its duration.

How payments work

Once your IVA has been accepted you’ll simply pay one affordable monthly repayment to your advisor who will then distribute it to your creditors.  This payment will typically include your advisor’s own fees too, which are usually in the region of £5,000.00.

What happens if any assets are included in the IVA?

If you’ve incorporated any type of assets into the IVA (such as a vehicle, or other property) then your advisor will sell these to raise further funds and distribute them in accordance with the IVA requirements.

If you have a property with any equity in it then you may also be required to re-mortgage it during the last year of your IVA to raise a lump sum.  However, this very much depends on the property’s value and whether your creditors consider you have sufficient equity in it.

Who will manage the IVA?  My creditors or my advisor?

Once you’ve entered into the IVA then the ongoing management will be dealt with by your advisor.  Make sure you pick the best IVA company for your  situation. Your creditors will no longer be able to make contact with you; nor will they be able to request any further money at the end of it.  Any remaining balance will simply be written off.

Your advisor will keep the IVA under constant review and of course, will make contact with you should he or she have any specific concerns along the way.

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