---

1. What happens if the creditors reject my IVA?

An experienced IP should be confident of getting more than 90% of IVA’s approved so this should not happen too often. In theory, you’ve made your best offer and the creditors have rejected it, so logically the creditors should then press for you to be made bankrupt as the only alternative left. In practice, they don’t, mainly because it costs a lot to make
someone bankrupt.

You will have a number of alternatives;

• Soldier on” in the knowledge that your creditors will continue to chase you and in the hope that something will turn up. Not really an option.
• Make yourself bankrupt.
• Commence a debt management plan to get your repayments to an affordable level.
• Try to obtain an explanation as to why your IVA was rejected and set yourself the objective of removing the obstacles, to enable you to propose another IVA in the future.

 

2. What happens if my circumstances change during the IVA?

The procedure does allow the terms of the IVA to be varied to reflect a change in circumstances provided the creditors agree. It’s important that this doesn’t happen too quickly after the start of your IVA because you won’t have had the chance to demonstrate your commitment to the process and the creditors may question your judgment at the start
of the IVA. If they do, then it is possible that they may reject a variation and the IVA will fail. You’ll then be back in the position described in 1 above.

 

3. What if I have CCJ’s registered against me or a creditor has started bankruptcy proceedings?

Neither of these can stop an IVA being approved. It doesn’t help that matters have been left so late that creditors have taken this action because they will be entitled to vote in the IVA and may blame you for a lack of response previously. However, they (and your other creditors) should judge your proposal on its merits, and if they are convinced that you are making a reasonable proposal should vote in favour.If the IVA is approved then the legal implications of any CCJ’s or bankruptcy proceedings are lifted immediately.

 

4. Can I buy a property during my IVA?

It’s an important commitment that you make that you will not incur any new credit during your IVA and so you would not be able to obtain a mortgage without the approval of your Supervisor. In addition, you’re unlikely to have the deposit to be able to put down on a mortgage, or the money to pay the costs of the purchase of a property, since the creditors would expect you to pay this money in to the IVA. However, if you were buying the property jointly with another party who would meet these costs on your behalf, you could demonstrate to the Supervisor that your housing costs would not exceed those budgeted for during the IVA and you could find a lender who would give you a mortgage advance, it remains a theoretical possibility.  

 

5. What about my Landlord?

It is not possible to include rent arrears within an IVA since it will not give you protection from repossession. Any rent arrears will need to be paid off during the IVA and there should be no necessity to inform your Landlord of your IVA.
Provided that you pay your rent on time there is no reason why you should not continue to live in rented accommodation free from interference from your Landlord.

 

6. Are there any other creditors I can’t include in my IVA?

It isn’t possible to include in an IVA amounts owed to creditors that you would still have to pay even if you were made bankrupt. These are

• Court fines.
• Matrimonial debts arising from an order made by the Court.
• Student Loans.

 

7. I’m self employed. How does that affect me?

Your business debts are no different to your personal debts and need to be dealt with in your IVA. If you owe suppliers significant amounts it may bring in to question whether your business is profitable and whether you should continue trading. In addition, if you have to include trade suppliers within your IVA it is likely that your business will be damaged by difficulties in sourcing product.

More commonly the self employed will have debts owed to HM Revenue and Customs which can be included in the IVA and special rules apply to the amount that HM Revenue and Customs can claim for in the IVA.

Fundamentally, however, whether large or small, you will have to be able to demonstrate that your business is profitable and that you can earn a living from it that will enable you to honour your commitment to the IVA.