IVA Documentation

Individual Voluntary Agreements (IVAs) are an alternative to Bankruptcy that are often preferred by insolvent home owners looking for a solution to help with repaying unsecured debt without having to sell their homes. For anyone looking to apply for an IVA, then the first port of call is a licensed Insolvency Practitioner (IP) who will be able to assess the debtor’s circumstances and advise if an IVA is the most suitable option.

Application Form

Once it has been established that an IVA is indeed the best way forward, the debtor is required to complete an application form that will usually ask for all details of the individual's personal finances, including outstanding debt or liabilities, any existing mortgages, any assets that may be owned, details of income and reasonable monthly expenditures.

Evidence of financial situation

The applicant is also required to submit documentation as evidence to support their application. In relation to current liabilities; statements or letters for existing and potential creditors will be required along with child maintenance payments and should the applicant have car finance or a hire purchase (HP) agreement, evidence will also be required. In many cases, car hire or HP agreements are not taken into consideration in an IVA as the car could be simply repossessed if repayments cease. However, if the car is required for a valid reason, and the payments are not excessive, then it may be included in the IVA repayment calculations.

Evidence of Property and Assets

Where the applicant owns their own property and there is an outstanding mortgage, then a mortgage statement will need to be supplied. While the mortgage repayments cannot be included in the IVA as a debt, it will be taken into consideration when calculating how much the monthly IVA repayment will be. Furthermore, a property valuation will need to be supplied.

Where an individual has assets, evidence is required and where there are physical assets, independent valuations will need to be provided along with endowment policy surrender values, which can be obtained from the providing insurance company. Proof of salary can be provided in the form of three recent payslips (running concurrently). If payslips are not available, bank statements (which may be requested as a matter of course) should suffice.

IVA Proposal

Once the IP has received the application form and all supporting documentation, they will be able to calculate an affordable monthly repayment and write a proposal that will be presented to the creditors who will then vote on whether or not to agree to the terms.

It is important that all the information and evidence presented is honest and accurate to ensure the best chance of an IVA being approved.