It normally takes 4-6 weeks to get an IVA. There are a number of activities to complete which usually require this amount of time.
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- Drafting your IVA Proposal
- Reviewing and Signing your documents
- Time required for Creditor Review and Meeting
- Managing your creditor payments during the application
Drafting your IVA proposal
Your IVA Proposal is a formal document which details your personal circumstances and what you owe. It also highlights the amount that you will repay your creditors during the Arrangement.
The document must be drawn up by an Insolvency Practitioner (IP). Before they can start this work you must provide them with paperwork which confirms your circumstances.
Getting the required paperwork together is one of the main things that delays the implementation of an IVA. As such it is important that you gather the documents together and return them as quickly as possible.
If you can provide all the paperwork that your IP requires within a week or so there should be no reason why you should not get an IVA within 4-6 weeks.
Review and Return your IVA Proposal Document
Once your IP has received your paperwork they can draft your IVA proposal. This in itself should not take more than a day or two.
However they then have to post the document to you for your review. You need to read it through carefully to ensure you understand all the terms and obligations you will be under once the Arrangement is in place.
Once you are happy you must sign the document and post it back to your IP. Generally speaking this part of the process will take about week allowing for the time taken by the postal service.
If you do not understand your proposal or feel that changes need to be made it is very important that you speak to your IP about these now. Making changes later will delay the time it takes to get an IVA.
The time required for Creditor Review and Meeting
Once you have returned your signed document to your IP they will forward a copy to each of your creditors. They must then give them a period of at least 2 weeks to review the proposal.
At the end of this time a Creditors Meeting is held. In theory this is an opportunity for the creditors to discuss your offer. In practice however it is unlikely that they will attend the meeting. Instead they confirm their acceptance by e-mail.
Given your IVA is accepted your IP will inform you of this and the Arrangement starts. Both you and your creditors are then legally bound and you must begin making the payments you have agreed.
If your IP cannot get agreement from a sufficient number of your creditors by the date of the Creditors Meeting it can be adjourned. This would add an additional 2 weeks to the process.
How to Manage your Creditor Payments during an IVA Application
Generally you stop paying your unsecured debts during the IVA application period. The reason is that you do not have sufficient money to maintain the payments without continuing to borrow and you must stop doing this.
As a result your creditors may start collection actions against you. You could start receiving threatening collections letters and phone calls.
If this happens do not be afraid to tell them that that you are proposing an IVA and that they will be hearing from your IP shortly. Most creditors will then agree to put their activities on hold.
If you are currently using a Debt Management Plan it is best to maintain these payments until your IVA is in place if you can. This will reduce any contact you receive from creditors.