What is the role of an insolvency practitioner in managing my IVA?
The IP has several different roles to fulfil during your IVA.
Assessing if an individual voluntary arrangement is right for you
Their first task will be to assess whether an IVA is affordable and right for you. The insolvency practitioner is responsible for giving the best possible advice. if an IVA is not the right option, they’ll recommend an alternative.
They’ll firstly act as an advisor to you and help you finalise the terms of your IVA.
Once you decide to go ahead with an IVA, the IP becomes your Nominee. At this stage they have legal duties to fulfil and need to report to your creditors on the viability of your IVA.
The IVA proposal
They’ll work with you to gather all relevant paperwork and supporting information to draft the IVA proposal. The proposal is a legal document, like a contract, which details your IVA offer to your creditors.
Your insolvency practitioner will make sure that your IVA Proposal is fair to both you and your lenders. This should mean that you’ll be paying as much as you can afford, without setting yourself an unrealistic challenge.
Once it’s been drafted and verified by you, the IP provides copies of the proposal to the creditors and arranges a creditors' meeting. It's during this meeting that a decision will be made by creditors as to whether to accept the IVA, and make it legally binding.
When the creditor’s meeting takes place, your IP will check to see whether enough creditors have voted in favour of the terms in your IVA Proposal.
If any creditors have requested 'modifications' to those terms, your IP will discuss them with you. You'll have to agree to these before your IVA proposal can be considered accepted, and the meeting can be brought to a close.
Once the creditors meeting is finished, your IP will draw up a report that shows what happened at the meeting, any modifications, who voted and who accepted. This report is then sent to you and all your creditors.
Your insolvency practitioner in their Nominee role must be completely impartial. They can’t be influenced by either you or your creditors.
Supervising your individual voluntary arrangement
Once your IVA has been approved, the IP becomes the Supervisor of your IVA. Their role includes reviewing your IVA at least once a year.
This involves reviewing your financial situation, and you may have to provide financial documents such as payslips. They need to make sure your earnings are still the same, and there are no changes to your financial situation that might affect the terms of your IVA.
In the Supervisor role, your IP is also responsible for collecting and passing on your payments, and ensuring you stick to the terms of the IVA. If the monthly payments are not made on time, or if you don’t comply with reasonable requests from your insolvency practitioner, the creditors will be informed.
Under certain circumstances, your insolvency practitioner can terminate your IVA. This would happen if it became known that you had been untruthful about your financial situation.
Your IP will also be responsible for cancelling your IVA if you choose to do so for whatever reason. However, you should discuss this with your IP first, as cancelling an IVA could have a great impact on your future financial position.
What is the difference between a Nominee and a Supervisor?
The Nominee helps you set your IVA up, whereas the Supervisor manages your IVA once it’s agreed. Usually your insolvency practitioner will act as both the Nominee and Supervisor, so you’ll be dealing with the same organisation throughout your IVA.
Do I need to tell my insolvency practitioner about changes in my financial situation?
If your financial situation changes either for better or worse during the course of your IVA, you’ll need to get in touch with your IP to inform them. If your income increases in any way, you might be required to change your payment plan and pay more to your creditors.
Most IVAs contain a ‘windfall clause’. This means that if you come into any money unexpectedly, such as from an inheritance or bonus at work, you’re likely to have to put some or all of it towards your debt repayments.
What if I have a problem with my insolvency practitioner?
Sometimes it’s possible for you to have a disagreement with your IP about how to continue to comply with the terms of your IVA.
The first thing you should do is write to your IP, explaining the problem or grievance. If that doesn’t bring about a successful resolution, the next step would be to write to the IP's regulatory body.