If you’re looking to go into an IVA, then you’ll need to understand the application process and what happens along the way.  In this article we take a step-by-step look at what to expect and what your insolvency practitioner will be taking on board for you.


Step 1: The first step towards entering into an IVA is to seek IVA advice from an independent, regulated insolvency practitioner.  Before you attend your initial consultation, you’ll most likely be asked to draft a full list of your income and outgoings.  This is a vital part of the process as it will enable your chosen advisor to determine what your disposable income is, since this will be the basis of your monthly repayment should your creditors choose to accept your proposal.


Step 2: At the initial consultation (which is usually free of charge), your advisor will talk you through the application process and start to put your proposal together.  Remember this is the ideal opportunity to ask as many questions as you need to, and your advisor will help you to understand what’s involved.  Entering into an IVA is an important decision so never feel as though it’s something you need to rush into – it’s best to take your time, ask as many questions as you like and then consider whether it’s the right decision for you.  Also ensure that you’re absolutely clear on what the IVA will cost and how much of your monthly repayment will be paid in respect of fees.


Step 3: Once you’ve decided to enter into an IVA then your insolvency practitioner will prepare the application for you.


Step 4: Your IVA proposal will be drafted for presentation to your creditors.  It usually takes around 2-3 weeks for your application to reach the point where your creditors are notified of the proposal.


Step 5: A creditors’ meeting will be arranged.  All creditors must be given at least 14 days’ notice of the creditors’ meeting and in order for your application to be successful, at least 75% (or more) of your creditors will have to accept your proposal.  For this reason, it’s important that your proposal is as realistic as possible.  However, there has to be a fine balance.  On the one hand, you need to demonstrate you can commit to the proposed monthly repayment and on the other hand, it needs to be sufficient enough for your creditors to accept it.  If they don’t, then you might have to consider other debt management solutions, such as bankruptcy.  That said, you should bear in mind that most creditors would prefer to get something back, rather than nothing at all, so don’t be deterred by this part of the process.  Your insolvency practitioner will also be able to guide you and give you more bespoke advice according to your personal circumstances.


Step 6: If your proposal is accepted then all creditors will be legally bound by the IVA and you simply need to maintain your monthly repayments.