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To propose an IVA there are a number of steps that have to be carried out. It will normally take around 4 weeks to complete them all.
- Complete your Financial Statement
- Write your IVA Proposal
- Documentation required to propose an IVA
- Proposal submitted to your Creditors
Complete your Financial Statement
The first step to proposing an IVA is to complete your financial statement. This is a record of your current financial circumstances. It includes 4 key areas of information.
Income – All sources of income should be recorded. These include wages after tax and any additional benefits you receive. Also any other forms of income such as a pension
Living Expenses – You must list all of your monthly living expenses. These will included everything from your mortgage or rent to food and travel costs.
Assets – Anything you own of particular value. This will normally include your property if you are a home owner and your car.
Unsecured Debts – A list of all the people you own money to. Up to date balances and account numbers should also be included
If you are self employed you will also need to prepare a projection of your business income and expenses for the next 12 months.
Write your IVA Proposal
The information in your Financial Statement is then used to put together your IVA Proposal. This is a formal document. It states how much you will repay your creditors during the IVA.
The Proposal also provides information about all your valuable assets. It states whether any of these will be made available as part of the Arrangement.
You cannot write your IVA Proposal yourself. This must be carried by a licensed Insolvency Practitioner (IP). Please contact us for help to find a suitable IP.
All of the creditors you owe money to are also listed. This allows each of them to understand the extent of your financial difficulty. It also helps to show you are not treating any preferentially.
Documentation required to propose an IVA
Before your IVA Proposal is finalised the Insolvency Practitioner will require proof of all the financial information you have provided.
Generally speaking you will need to provide copies of the following:
- Proof of your ID (Copy of your passport or photo driving license)
- A recent statement from each of your creditors to prove the outstanding debt
- Last 3 months statements from your bank account
- Last 3 months wage slips
- Copy of your rent agreement (if renting)
- Copy of your most recent mortgage statement (if home owner)
- Written valuation of your property (if home owner)
Your insolvency Practitioner might ask you to provide additional information depending on your circumstances.
IVA Proposal submitted to your Creditors
Once your IVA Proposal is drafted and all the information verified with appropriate documentation it will be sent to you to review and sign. You must first read through it carefully.
In addition to your financial proposal the document will include the terms and conditions of your IVA. It is important that you read through these and that you understand them.
If you have any questions about anything within the document you must discuss them with your Insolvency Practitioner.
Do not sign your Proposal unless you fully understand the proposal and its implications for you and your assets. Once your IVA is agreed the terms cannot easily be changed.
Once you are happy you must return the signed document to your IP. They will then send a copy to each of your creditors so they can consider your Proposal.