IVA Completion Timescale

What is the average IVA Completion Timescale? This guide describes the different phases of the process with maximum number of days required.

Phase 1 – Case Received – No. of Days = 0

Your case will be received typically on the same day as you hire an Insolvency Practitioner.

Phase 2 – Letter to the Creditors – No. of Days = 1

A formal letter is dispatched to all of the Creditors to whom the client owes the debt. This letter informs them that the debtor has opted for an IVA and an initial draft of the IVA Proposal is being prepared. This proposal is also dispatched to the Creditors later on.

Phase 3 – Draft IVA Proposal issued to the client – No. of days = 7

A draft of IVA Proposal will be issued to the client (the Debtor). At this point the client is asked to provide any further information if he has. The client will go through this draft and may ask questions, if any.

Phase 4 – Draft returned from the client – No. of days = 7

The client then returns this draft to the IP. The IVA proposal may be updated according to the information provided by the client. Then this draft is formally served to the Nominee.

Phase 5 – Consent to Act – No. of days = 2

When the Nominee’s ‘Consent to Act’ is received, an Interim Order application is provided to the client.

It is a common practice that the clients file the paperwork at the Court themselves. However sometime the client may swear before a solicitor and the Insolvency Practitioner may file the petition.

Phase 6 – Interim Order – No. of days = 1

The local County Court will grant an Interim Order. All the court proceedings against the client will be stopped i.e. a petition for Bankruptcy. However, these court proceedings may be resumed in case IVA fails.

Phase 7 – Nominee’s Report – No. of days = 14

The Nominee may be the Insolvency Practitioner you hired or any other authorized person i.e. a member of a body recognized for the purpose by the Secretary of State.
The Nominee’s Report is then filed at the Court.

This report has details about the IVA proposal. The date, time and place for Creditors’ meeting is also mentioned.

Phase 8 – Notice of Meeting – No. of days = 7

All the concerned Creditors are sent a notice of the Creditors’ Meeting. Usually this notice is sent 21 days prior to the fixed meeting date. A copy of the IVA Proposal and Nominee’s Report is also dispatched along with the notice of the meeting.

Phase 9 – Creditors’ Meeting– No. of days = 21

The Creditors’ meeting is held on the date specified in the notice of meeting. Insolvency Practitioner chairs this meeting. Debtor and the agents from the Creditors are also present to discuss the matters and for the voting process.

This meeting must be held within 28 days after hearing of the Nominee’s Report. However if the meeting becomes too long it can be adjourned. The maximum number for the meeting to be adjourned is 14 days from the original date of the meeting.

In this way, the estimated completion timescale for the IVA process is 60 days. However this is a typical estimated timescale. The Insolvency Practitioner you hire will give you a more appropriate and realistic timescale for your specific process.

Once you succeed in securing 75% votes from your Creditors in your favor, you have your IVA.

A typical IVA will last up to five years and at the end of this period all of your unsecured debts i.e. Credit Cards, Store Cards, Student Loans etc are written off by the Creditors.

What is an Individual Voluntary Arrangement?

The Individual Voluntary Arrangement (IVA) is a formal repayment plan to eliminate your unsecured debts. This is a possible option to avoid Bankruptcy for people with a regular income and high debt.

If you have a debt of over £15,000 you are eligible for the IVA. This process is quite reasona ble in nature as you have to pay the spare amount from your income after spending for your basic living needs.

The IVA is a legally binding agreement and you must hire a legal expert to mediate between you and the Creditors. This legal expert is called Insolvency Practitioner or IP.

You cannot apply by yourself. An IVA is a legal agreement that should be evaluated carefully with an licensed debt advisor. When you contact a professional, make sure you understand the costs and implications involved.

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