Dos and don’ts of IVA’s

If you’re paying off a debt using an Individual Voluntary Arrangement (or IVA), sometimes it’s hard to get good advice. Here’s a basic guide to follow on what to do and what not to do if you’re about to get into one.

The basics

Don’t forget what you need to be in one. First of all, a debt. But, what kind of debt? If the money you owe is for child support, a student’s loan, is for a mortgage or a rent arrear or is a guarantor loan’s debt, then forget about it. No one’s going to approve that. Any other debt is mostly approved. Generally it’s about a credit card, or council taxes debts. IF you have debts from two creditors or more, you have more chances to be approved, but it’s not a requirement, just an advice any professional will give you. Anyway, if that’s all right, then go check the second thing on the list: your incomes. You’re about to monthly pay your debts, so you need to prove that you will have the money to pay the arranged amount every month. Before approving your petition, they’re going to ask you for an ID (don’t forget your credits records are online), three months of bank records, and the last three pay records from your employer. And if you’re not employed, then any kind of evidence that can prove that, so be prepared. The rest is just papers and waiting.

Advanced mode

Okay, you’re in now. Every month you’re paying and waiting for the arrangement to be done. Now your Insolvency Practitioner (or IP) was designed by the court to be an intermediate between you and your creditors, so beware, you’re being supervised. Of course, you cannot be contacted by any of your creditors directly, so if that happens you have to notice your IP and legal actions have to be made, as the creditors are not allowed to contact you by any media but through your IP. And also, if your circumstances change, like if you move (don’t forget, the IVA’s tend to last 5 or 6 years in general), or if your income changes (either increases or decreases) you have to tell your IP. If there’s a problem, the IP has to advise you and tell you how to proceed. This procedure has a court in the middle, and everything has to be advised. And don’t be scared if every year you get a review from your IP, it’s their work to make sure your bank statements and all the information you give is accurate.

Into the finish line

There are years from the start point to the finish line, generally five or six, but once you get to the end, you are a new person, and that’s something you cannot let go. IF no one gives you the completion certificate, ask for it. And your debt record has to be cleared now. Move on, go ahead and don’t make any mistakes. You have been given a second chance.