The first step in applying for an IVA is to make a comprehensive income and expenditure statement. Make sure your income is forward-looking, and your expenditure is realistic. Once approved, you will have a fixed period for the IVA to work. Most IVAs last for 5 years. During this time, you will make monthly payments to your creditors. The windfall amount you receive will be paid to your creditors.
In addition to this, take care of the below points when apply for an IVA online:
Income and expenditure statements should be forward-looking
If you are considering applying for an IVA online, you should make sure that you submit a comprehensive income and expenditure statement that is forward-looking for the duration of the arrangement. Your income and expenditure statement should match the SFS (Standard Financial Statement) approved by the Money and Pensions Service. The SFS must not contain any deviations, but any deviations should be clearly stated in your proposal and any reports you make to creditors, as well as on your IVA file.
Moreover, your income and expenditure statement should be detailed and realistic, as your IVA provider will require it to determine if you can make your monthly payments. The Insolvency Practitioner may require a bank statement or other documents to verify expenditure items. This is because an IVA is an agreement between you and your creditors, so you must be able to live within it. If you don’t, you might find it difficult to keep up with the payments and may be unable to afford the agreement.
Creditors may not agree to the terms of your IVA proposal
If you have massive debts and cannot pay them back, an Individual Voluntary Arrangement could be a good option for you. However, it is important to remember that creditors must agree to the terms of your IVA proposal in order for it to be accepted. As with any other form of debt relief, it can be difficult to be accepted by your creditors. Therefore, you should seek advice from a money adviser before submitting your IVA proposal.
Some creditors may not agree to the terms of your Iva proposal based on your past actions and failures. For example, if you’ve had an extravagant lifestyle and have a history of non-payment, your creditors may be concerned that you’ll never stick to the arrangement. Therefore, you should seek debt advice and work closely with an IP before submitting your application. The sooner you apply, the more likely your IVA will be approved.
IVA windfall sum must be handed over to creditors
A windfall is a money that you receive that you do not expect to receive, such as compensation from third parties. This would include compensation payments for misselling PPI or personal injury claims. However, if you receive any amount above what you expect to earn, you must pay it into your Arrangement. This amount, however, is unlikely to be used to pay off your IVA early. Therefore, you should consider paying your windfall amount into the Arrangement before you receive it.
Under an IVA, you must declare any assets that you have, including a car, property, savings, and investments. Generally, non-essential assets will be excluded, but you may still be able to keep some of these assets as a windfall. However, it is possible that you will have to sell these non-essential assets as part of the IVA. If you fail to do this, the Official Receiver must sell them.
IVA fees are adjusted into monthly payments
Once you have agreed to an IVA, you will have to make regular payments to your creditors. The first two months of your IVA will probably cover the costs in full, but your creditors will get a proportion of each payment until you have paid off the disbursements. The fees for the IVA supervisor are usually fixed at PS1,750 and are drawn into your monthly payments proportionally throughout the length of the arrangement. Other fees, like registration fees, are paid to third parties involved with your IVA, such as your creditor.
Most IVAs take around five to six years to complete. If you have equity in your property, you will have to release this towards your IVA. Otherwise, your IVA will last for about six years. If you fail to finish your IVA, your creditors may make an early settlement offer. This may mean that your monthly payments are higher than you can afford. If you have a large amount of equity in your home, you could opt for early termination and pay off the debt in full.
IVA Register is a searchable database
You can use the IVA Register to look up the details of someone involved in an IVA. You can search the database for free online, by trading name, or by name. Alternatively, you can visit an official receiver’s office to get the details of an individual in the IVA Register in person. This search will reveal information such as the individual’s full name, last known address, gender, date of birth, and IVA number. The details are kept for ten years, so it’s important that you’re aware of the details on the register in case of an identity mistake.
An IVA can save a person’s property. If more than seventy-five percent of creditors approve the IVA, the debtor can avoid bankruptcy. But it does not mean that the IVA will give the person the freedom they want. A debtor should be honest with his or her IP, as it will help the IVA register paint a true picture of their financial situation. For this purpose, you must present proof of income or savings, such as recent bank statements, mortgage contracts, or rent agreements.
And that’s all. Keep these factors in mind to successfully apply for IVA.