What is an IVA proposal?
An IVA proposal is a document which explains why an IVA is a suitable solution for this applicant; and why creditor acceptance is a reasonable expectation.
What is contained in an IVA Proposal?
An IVA proposal should also include details of:
- Anticipated income during the period of the IVA.
- Details of the IVA provider and insolvency practitioner
- Details of any other IVA application made in the past 24 months, what the outcome of that was and what differs this time.
- Your assets with estimated values, plus any assets available from and 3rd parties which are to be introduced into the IVA.
- Details of your debts and details of any guarantees given by them to other people, (guarantor loans).
- Details of any charges on properties (ie secured loans) and any significant assets you want to exclude from the IVA, giving reasons why.
- The proposed length of the IVA with levels and schedule of payments to creditors. IVAs don’t normally last more than 60 months – although in some cases they can be 72 months.
- The fees to be charged by the IVA provider and the basis on which they are calculated; see more about IVA fees.
- Whether you have previously been bankrupt or subject to any other insolvency proceedings.
- Previous attempts to deal with your financial problems and reasons why they were unsuccessful.
Who prepares an IVA proposal?
Introduced in the 1980s, IVAs were an alternative to bankruptcy for business people and the self-employed who had fallen into financial troubles. Numbers were low, cases complex, and usually dealt with solely by an Insolvency Practitioner (IP).
IVAs have since morphed into a consumer product, also helping employed people with more straight forward financial affairs.
IVA proposals are now mostly prepared an IVA drafter, under the supervision of the IP who is responsible for proposal and the advice given. The more complex or unusual the case, the more input from the IP is required.
The IP must ensure a balance between the interests you and your creditors. Only quality IVA proposals with an expectation of success should be presented.
Once the IVA proposal is approved by you – is considered by the creditors at what is called the Meeting Of Creditors (MOC).