What happens to my debt after I have been approved for an IVA?
An IVA is set up by a debt management company. Upon acceptance, you will pay your supervisor an agreed set monthly sum as outlined in your proposal. He/she will manage your debt by using your contribution to make monthly payments to your creditors for a set period of five years.
You will need to set up a new bank account to submit your monthly repayments. It is imperative that you make these monthly repayments, as any defaults could result in bankruptcy. A default on an IVA will be recorded if you miss three consecutive payments over a period of time. If, for any reason, you are finding it difficult to meet your repayments, you should consult your supervisor immediately.
It is important for your supervisor to ensure that your personal circumstances remain unchanged. Therefore, you will be asked to send regular proof of your earnings. If, for example, your wages have decreased or increased, your IVA can be adjusted to suit your income. Every year, your supervisor will review your case and will ask you to provide evidence and clarification that everything recorded on your initial income and expenditure form remains the same. If things have changed, the IVA can be adjusted.
Should you find yourself in a position to be able to offer a full and final settlement, you must be prepared to pay your creditors the full cost of each of your original debts or a substantially large proportion.
When your five year repayment period has reached its end, your bank account will be closed and you could consider yourself debt free.
IVA and Bankruptcy News posted on 31/05/2007 07:03:22
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