Further IVA questions and answers
- Are there any jobs I’m restricted from doing with an IVA?
- Do all of my creditors have to be included in an IVA?
- How is it all decided?
- I received a default notice. Does this mean I’m being taken to Court?
- When do I stop paying my creditors?
- If my IVA is rejected will I automatically be made bankrupt?
- Will my IVA be advertised?
1. Are there any jobs I’m restricted from doing with an IVA?
Unlike bankruptcy, there are no legal restrictions that prohibit you from any occupation at all. However, if you hold a professional qualification and are concerned that entering into an IVA would have any negative implications, it would be prudent to check with your professional body or association to check its policy. If you are employed, you should check your contract of employment before signing an IVA to see whether your company has a policy in regard to insolvency. If you have any concerns at all, discuss your situation with your line manager or a member of your human resources department.
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2. Do all of my creditors have to be included in an IVA?
All unsecured creditors must be included in your Individual Voluntary Arrangement (IVA). This is because if any creditor were left out of the agreement, they could take legal action against you or even petition for your bankruptcy, which would mean your IVA would not be approved by the rest of your creditors.
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3. How is it all decided?
Once we have drafted a proposal and we have agreed with you how much you can afford to pay into the IVA, we call a creditors’ meeting. We forward your proposal to all of your creditors and ask them to review it and vote in acceptance or rejection of the IVA before the date of the meeting. Although the creditors are invited to attend the meeting, it is extremely rare that they do. They will normally simply complete the voting forms and return them to us. To approve your IVA, at least 75% per cent by value of the creditors voting at the meeting must accept your proposal. It is unlikely that all of your creditors will vote. However, all of your creditors – even those that don’t vote – will be bound by the arrangement as long as it has been accepted by 75% of the value of those creditors voting. Click here to see how IVAs work in practice.
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4. I have received a default notice. Does this mean I’m being taken to court?
No. If you are in arrears, your creditor will normally issue a default notice after a number of attempts have been made to obtain repayment. A default notice must be issued before any legal proceedings commence. Your creditor may then pass your details on to a debt collector or solicitor who will continue to chase you for the outstanding balance. However, if you receive a County Court claim form (which can only be served after the default notice) you should seek legal advice.
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5. When do I stop paying my creditors?
As soon as you make the decision to proceed with an IVA, you can stop paying your creditors straight away. Some people prefer to make token payments to their creditors as a gesture of good will. But this is not essential.
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6. If my IVA is rejected will I automatically be made bankrupt?
Although we try our best to get every IVA approved, sometimes creditors will reject a proposal and we will be unable to change their minds. This does not mean you will automatically be made bankrupt, however. There may be other options open to you. It may even be possible for us to review your case again and put forward a new IVA proposal, depending on whether we feel creditors are likely to accept it a second time round.
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7. Will my IVA be advertised?
Unlike bankruptcy orders, IVAs are not advertised. However, your details will be kept by the Insolvency Service, a government body, and will be available for people to search for and review on their website.
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