If you have made the decision to apply for an IVA, then you would have heard the term IVA proposal when discussing the process with your debt advisor.
Your IVA company would have requested various information and documents to support your IVA application. This is all collated and forms the basis of your IVA proposal.
This proposal is an important part of the IVA process and in this article, we will explain everything you need to know about it.
What is an IVA proposal?
An IVA proposal is the document that states the terms of the IVA agreement between you and the companies you owe money.
If your creditors accept the proposal in a meeting of creditors, it will become a legally binding agreement that you and your creditors must follow.
What is included within the IVA proposal?
An IVA proposal will include everything your creditors need to know to make an informed decision about your IVA.
The type of information included in the proposal will include:
Applicant details – Your name, address and contact details will be included in the proposal.
Reason for the application – The proposal will explain the reasons why you are considering an IVA, such as being unable to keep up with repayments.
Financial income & expenditure – This gives creditors an insight into your financial hardship. It will include not just your income and expenses, but your whole household to ensure any repayment plan is affordable for you.
Assets – Your proposal will need to detail all of your assets, such as your home or car, and any outstanding liabilities. If your IVA is accepted, your creditors could be writing off a considerable amount of debt and wish to ensure there isn’t equity available that could clear the debt in full.
Creditors owed – The IVA proposal will state every unsecured debt you owe, plus the contractual repayment amount owed to creditors.
The legal terms – This includes the terms set out within the IVA that you agree to abide by such as your credit restrictions, notifying of changes in circumstances and what happens if you breach the agreement.
Insolvency practitioner particulars – The name and contact details of your insolvency practitioners. Any costs and fees associated with the IP will also be disclosed.
Reviewing your proposal
Once you have collated all of the required information, a draft proposal is created for you to read through and ensure all the details are correct and factual.
One key area for the assessment should be your income and expenditure. This forms the basis of what your monthly repayment towards the individual voluntary arrangement will be.
If there are expenses or other areas of income that have been omitted during discussions with your debt advisor, make sure these are added to the proposal.
Returning your signed proposal
Once you are happy with all the details within the document, it is time to sign and return the IVA proposal.
When we have received your signed copy of your proposal, this is then distributed to your unsecured creditors for their consideration.
Alongside the proposal, creditors are given approximately 17 days before a meeting of creditors to decide if they will accept or reject your IVA proposal.
If the majority of your creditors agree to the terms set out within the proposal, your IVA will be accepted and you can start making repayments.
The IVA proposal – Conclusion
The IVA proposal is an important part of the process of obtaining an individual voluntary arrangement.
It is essential that you review the proposal carefully to ensure it is factual and that you are comfortable with all the terms and conditions.
Once you are happy, our insolvency practitioners can move forward with your IVA process and set a date when you can find out if your IVA has been approved.
If you have any questions in regards to the IVA process, feel free to call our team of friendly advisors who will be happy to assist.
