If the bank that you maintain your current account with is a creditor you will need to open another ‘basic’ account with an unrelated bank. You should set about this without delay and transfer all of your direct debits to the new account together with your wages or salary if this is paid directly into your bank account. If you have an overdraft or loan with your present bank it is likely that your account will be frozen when they become aware of your financial position.
Unsecured creditors’ would consist of credit card debt, personal loans, bank or other guarantee, loans from friends or family or any other loan where a charge on property or other security has not been provided.
Up to the point of the creditors’ meeting (when the IVA is formally approved) the Insolvency Practitioner is referred to as the Nominee. From the date of the creditors’ meeting he is referred to as the Supervisor.
This should be safeguarded under an IVA. Exactly what is included within your proposals to creditors’ depends of the level of equity that you own. Your creditors’ will expect your property equity to be taken into account within your proposals. This is an area we will discuss carefully with you. Often, it is agreed with creditors’ that the property is revalued (usually in year 4 of the arrangement) and at that time you use your best endeavours to obtain a remortgage. If you cannot obtain a remortgage at that time, creditors’ usually agree that the monthly contributions continue for a further year instead of the equity being released.
In most cases you would retain your car. After all, if you did not have your car it may be much more difficult or impossible to continue to work. Only if the car is particularly valuable may the creditors’ insist that it is sold and replaced by a cheaper vehicle.
As with bankruptcy, most creditors’ will be uninterested in your personal belongings unless you have any items of high value such as works of art or valuable antiques. Should you think you may have any such items you need to advise us?
You need to live in England, Wales or Northern Ireland. Often £15,000 is stated as a minimum amount but this is not a rigid figure. Similarly, it is often stated that you need a minimum of 3 creditors’ but an IVA may be suitable where there is only one creditor. We will guide you as to your best option.
Yes, you can. In addition to all the usual rules you will also need to produce a simple budget for your business showing your anticipated profits for the next year. Of course, we will guide and assist you.
So long as the IVA is properly drafted, which it will be if you engage us there is a strong likelihood that creditors’ will accept your IVA. In 2010 the figure for accepted IVA put forward by G&K was 90%. In 2011 the corresponding figure is 92%.
Costs of the IVA will be explained to you in detain before any commitment to the IVA is made by you. Usually, it is agreed with creditors’, that the costs are included within the monthly contribution that you make. Therefore you have no additional charge for our charges to the IVA.
Usually, this takes 4-6 weeks for us to finalise your proposals when they would be approved by you and forwarded to creditors’. A further 2 weeks’ notice has to be given to creditors’ before the creditors’ meeting. So in total, it usually takes 6 to eight weeks. If there are any reasons why this process needs to be fast tracked, we will. It is important you let us have information we request as soon as possible as any delays are likely to lengthen the process.
If your circumstances change it may be possible to agree a variation with the creditors’ at a reduced contribution, either temporarily or permanently. The important thing is to speak to us as soon as you are aware of any problems.
Your credit rating will be affected by the IVA and you will need to discuss any intended seeking of credit during the IVA with us. The record of the IVA normally stays on your credit history for one year after the conclusion of the IVA.
Yes, a director of a company can be subject to an IVA. This office is prohibited for an undischarged bankrupt.
Unlike bankruptcy, you are not prohibited from public office. Certain professionals (for example, Chartered Accountants or Solicitors) can also continue to practice with the approval of their professional body which would not be possible if they were bankrupt.
This all depends on your individual circumstances and will be fully discussed with you. The norm is for a period of 5 years but this can be shorter in certain circumstances – for example if you are retired or close to retirement or if a lump sum payment is being proposed.
The fees that we charge are made up of two elements – these are the Nominee’s fee and the Supervisor’s fee.
The Nominee’s fee is charged for the preparation of the proposals, liaison with you and your creditors’ and calling a creditors’ meeting.
The Supervisor’s fee is for the monitoring of the IVA for the duration of the IVA. This includes liaison with creditors’ and you, annual reports to creditors’, distributions to creditors’ and dealing with any change in your circumstances.
Normally these fees are agreed with the creditors’ and are included within the monthly contribution.
All fees will be fully explained to you and be subject to a formal letter of engagement.