How to Apply for IVA? Complete Guide to Apply free IVA Application
If you are considering an IVA settlement program as a feasible debt solution in your journey to being debt free, then you may want to know what an IVA settlement program is, how to apply for IVA online & if the IVA can be the right option for you. Today, we will answer all your IVA-oriented queries in this guide.
Complete Guide to Apply free IVA Application
An IVA is usually known as Individual Voluntary Arrangement, is actually a legally binding settlement agreement conducted between you & your lender. This is usually used to assist you repay all your debts over a certain period of time. IVAs generally last for 5 to 6 years but can also be extended for an extra year if you have some equity in your property.
Well, an IVA settlement program night is the best possible way for you if you’re facing certain difficulties to repay your debts. The IVA settlement program will enable you to make pocket-friendly payments over many years. And at the end of the period, any kind of outstanding unsecured debt incorporated in the IVA settlement program is automatically written off.
How to apply for an IVA settlement program?
Before you opt Apply for an IVA Online, your insolvency practitioner will define each and every option available to you before making a commitment to an IVA. They must also be sure you read as well as understand the leaflet. Is the IVA a right debt solution for me?
More about applying for an IVA settlement program
#1: The very first step is to get in touch to the court for an interim order!
Your hired insolvency practitioner who is also known as IP may apply to the court for the interim order for preventing all your lenders action against you while an IVA settlement program is being set up. It means they cannot get any kind of court order against you, or even force you towards bankruptcy. Well, interim orders are pretty unusual & your IP might assist you to get court action adjourned instead.
#2. Discuss about all your finances & monthly payments
Your insolvency practitioner will verify your financial condition with you, including all your savings, spare income, as well as properties. Assets such as property or a vehicle might be involved in the IVA settlement program in order to raise more money for paying back to your lenders – generally, the IVA settlement programs have certain clauses about how your house is treated. Your insolvency practitioner might also recommend that certain assets aren’t incorporated, for instance, a van or building you require to run your business or a vehicle that you require to get to work.
Well, with the help of your insolvency practitioner, you can effortlessly work out a monthly payment plan to your lender. You’ll require to offer as much as you will be able to afford, otherwise your lender might not agree to this settlement program.
#3. drawing up a proposal
Your insolvency practitioner will assist you make a special proposal for your lender & the court. And in the proposal you’ll agree to monthly payment to your lenders in full or in part over a certain period of time, usually 5 to 6 years. Your insolvency practitioner will also make a report for the court that incorporates their opinion as to whether the settlement proposal will work or not. And the report will also include:
a complete financial statement, involving each and every details of your assets, monthly income, debts, as well as properties
a proposal setting out each and every terms of the proposed IVA settlement program, like the length of the settlement process & how much debts you actually intend to pay back
Each and every reason why the lenders should approve the IVA settlement program & that they’ll get more under this settlement program rather than they would if you go bankrupt.
Your insolvency practitioner will assist you determine the best possible proposal depending on your financial condition & the likelihood of lenders approving it. The IP must consider all the rights of the lenders to repay the debt & also your capacity to make regular payment.
If you ask to incorporate some special rules and regulations in the proposal.
#4. Lenders approve or reject your settlement proposal
Your insolvency practitioner will directly get in touch with your lender and ask them whether or not to accept your proposal. And it will generally be conducted at the IP’s office. And you have to attend the meeting session so that you will be able to represent your interests, although you do not need to appear in person as a teleconference can be conducted.
If the majority of the lenders vote for your settlement proposal, then the proposal is approved & it is directly reported to the court. And afterwards, the IVA will be binding on all the lenders, in fact those who voted against the settlement agreement.
This comes to the end of the How to apply for IVA online ? Here is a complete guide to apply for a free IVA application. Hopefully, we have provided sufficient information so that you can easily apply for an IVA settlement program. You can also apply for an IVA online. On the other hand, if you need more information or IVA debt advice then directly, simply reach us! We’d love to serve you at your convenience! Moreover, you can also give us a ring or simply visit our official website for getting further details regarding IVA settlement program.
How to Apply IVA? Frequently Asked Questions (FAQs)
The debtor needs to provide all the necessary documents accurately as asked by the IVA Supervisor. To draft the IVA proposal, commonly requested information includes:
Photo ID proof (a must)
Updated creditors' statements with adequate references.
Hire Purchase agreement (if any, required)
If you are a homeowner, secured loan statement or mortgage agreement
Proof of utility bills and council tax
Three months bank statement (recent)
Three months salary/wage receipts.
This information may differ as with the debtor’s circumstances. You could also be asked to provide evidence of your income and expenses to justify your claims. You can find detailed information even if you apply for an IVA online.
Whether you need to open a new bank account when applying for an IVA is confusing to many individuals. This requirement varies depending on the debtors and the IVA administration.
Suppose your current bank account has no benefit from an overdraft facility. In that case, you need to find a new bank to open a new bank account because debts included in an IVA consists of credit card, loans, overdraft, and credit agreements (arrears) with the bank.
In certain IVA cases and debtors' situations, the debtor has to change bank and open a new bank account there. That is because banks hold the right to Set-Off your accounts. Thus, you have to change banks when you apply for an IVA. If not, your current bank will take out all the withdrawable funds from your account to repay the additional debts to the IVA.
When you apply for an IVA, you must know certain risks and consequences involved. Such IVA risks and considerations include:
IVA is not private, so your credit profile will be public.
The creditors might reject your IVA proposal.
Till the time IVA is on your credit file, your credit rating will be affected.
Your IVA may fail if there is any violation of the IVA terms.
If the IVA fails, the creditors could file for your bankruptcy.
You cannot take high credits after entering into an IVA nor incur excessive expenses.
You do not have to pay an initial fee to apply for an IVA. Most IVA service providers do not charge any upfront IVA fees from the applicants. However, there are certain costs involved in setting up and processing the IVA. The overall IVA procedures in an expensive matter. That is why you have to pay up the incurring IVA administration and IVA setup costs. Irrespective of the IVA administrator, such IVA fees and costs are more or less the same. Also, you do not have to make any extra payments for these expenses. IVA fees and costs are included in the estimated monthly IVA repayments in the IVA proposal.
When you apply for an IVA online or offline, it is best not to pay up any upfront charges. As such, there are specific administration IVA fees to pay up. These IVA fees and costs consist of the Nominee, supervisor, and disbursements.
The nominee fee is for preparing the IVA proposal and the work effort that goes into working out the monthly IVA contributions. The Supervisor fee is for the monitoring and maintenance of the IVA till it comes to an end. Such IVA management includes meeting with the creditors, undertaking an annual review, monitoring regular payments, assessing debtors’ income & expenses, changes in financial situation, etc. Other than these primary IVA fees, additional costs go into disbursements for the external activities for the IVA setup.
So, if you apply for an IVA online, make sure to take the information of such IVA fees and costs from the IVA advisor.
People choose to enter into an IVA because IVA offers better benefits and protection to the debtor’s property, vehicle, and other assets. That is to say; when you apply for an IVA, your car is protected against selling to raise money for debt amount. While the IP works out the monthly IVA repayments, they take into account the minimal maintenance costs of the debtor's car, if any. So, you will be left with enough funds to tend to the car.
If the car is bought under the Hire Purchase Agreement, it will be a priority debt. And you will have to maintain funds to repay this debt separately.
There is no restriction regarding employed and unemployed individuals to apply for an IVA. However, if your only source of living funds is from the benefit-based income, there will be a high possibility that your IVA application will be unsuccessful. The security benefit funds are only sufficient for the individual to go through their life. As a result, IVA does not consider the benefit-based funds for IVA repayments.
Two individuals with a joint debt could apply for a joint IVA, better known as interlocking IVA. Entering a joint IVA is sometimes more effective than applying for an individual IVA. Two individuals contribute to the debt amount in a joint IVA, which lowers the individual repayment amount. If you cannot apply for an IVA, you can request a joint IVA if the other party agrees and is a viable option. Each individual has to pay up only the amount they are responsible for.
When you apply for an IVA online, you will receive detailed information about what it is, its work process, and what benefits it will offer. As your IVA proposal is accepted and is approved by the court, your advantages would be:
Any outstanding debt after the IVA is over will be written off.
You have to pay only what you can afford to the monthly IVA repayments.
Your home property, car, and other assets receive legal protection in an IVA.
Your debts remain static as long as IVA stands without any loan interests and charges.
You can take control of your debt limits and expenses.
You can keep doing your job or run a business in an IVA. As a result, even after clearing your debts, you prevent bankruptcy.
You will be a debt-free person after the IVA duration ends.