Setting up an Atlantic IVA (Individual Voluntary Arrangement)
Now you might think setting up an Individual Voluntary Arrangement would be difficult, but here at Atlantic Financial Management, we have a specialist IVA team who can help you through every stage of the set-up process.
The agreed payment proposal has to be sustainable for you, so it's really important that you tell us everything about your existing financial commitments, your income and personal assets. You or your partner must have a regular source of income from employment or self-employment.
Once this stage is complete and you've agreed with the suggestions proposed by the Atlantic IVA team, your appointed insolvency practitioner (IP) will then make a proposal to your unsecured creditors. If accepted by creditors then the IVA will be approved and sent to local County Court. Your IVA proposal will include any fees applicable charged by the insolvency practitioner.
Summary of an IVA Proposal
| Employed tenant, married (no dependents) in their late thirties with total unsecured debts of £24,927 with 7 creditors and liabilities exceed assets. | ||
|---|---|---|
| Monthly contributions (60 months @ £385 = disposable income) | £23,100 | |
| Insolvency Practitioner fees are taken from the monthly contribution of £385 | ||
| Less: | ||
| Nominee Fee | £2,000 | |
| Supervisor's Fee over IVA Term | £3,465 | |
| Irrecoverable VAT | £1,093 | |
| Costs | £350 | |
| Total Costs | £6,908 | |
| Net funds available to 7 unsecured creditors | £16,192 | |
| Dividend to unsecured creditors | 64 pence in the pound (£) | |
| Dividend in Bankruptcy | Nil | |
The creditor meeting will be held within 28 days of the documents going to court, and once those of your unsecured creditors that chose to vote have responded, we can then set up your payment plan and you will start your IVA. There may be variations to the proposal requested by your creditors that may need to be considered. Our insolvency practitioners have an excellent record of getting 98% of proposals accepted.
Once the IVA starts, the funds paid in are distributed by the IP to your unsecured creditors in accordance with the terms of the IVA. At the end of each year, your IVA supervisor will create an Annual Report that checks that your IVA is going along well. This will also update your creditors of any changes to your payment plan - perhaps if youve had a change to your income. The report will show what has been paid over the year.
If you are a homeowner then, dependent on the terms of the IVA, you may be required to explore releasing equity in your property to contribute to the IVA in the fifth year. Any requirement to release equity will be fully explained by the IP.
Generally, after 60 payments all your unsecured debts will be gone and you can then enjoy a debt free future.
On completion of your IVA, it is important to ensure that all credit agreements are shown as 'satisfied' on your credit file and that the public record no longer shows your IVA. This is a major step to improving your credit worthiness. Satisfied default records on your credit file should be deleted six years from the date that the IVA was put in place with the court.
With Atlantic Financial Management - it couldn't be simpler!
Important points to remember:
- An IVA is entered on a public register.
- Whilst on an IVA and for a year after completing it your credit rating will be affected - an IVA may last 5 years but the effect on your credit rating will last 6 years and potentially longer if the term of your IVA is extended.
- If your IVA fails, you may be made bankrupt and you remain liable for the balance of your debt and any Insolvency Practitioner fees and costs already incurred.
- Remember, you are not obliged to enter a debt solution with Atlantic Financial Management and you are able to cancel at any point whilst your IVA Proposal is being prepared without any financial penalty.
