Listed below are the seven steps involved with entering into an IVA
Step 1 – Find an Insolvency Practitioner Local to You
This is something you can do easily on this website. An Insolvency Practitioner (sometimes called and IVA Practitioner) is the only person who can represent you. It is not possible to enter into an IVA yourself.
Step 2 – Get all your paperwork in order
Your Insolvency practitioner will need to know about your current financial circumstances so it’s a good idea to get together details about you income and debts. (Credit cards, overdrafts, loans etc) They will also ask for a list of all of your asset (possessions of value)
Step 3 – Prepare a budget
Your practitioners will sit with you and prepare a household budget so they can assess how much surplus income you have every month.
Your budget should be carefully created to allow you to have a comfortable standard of living without being extravagant.
Debt payments are not included in the budget as your surplus income will go towards paying those.
Step 4–Prepare yourself for living within your means
This is a good time to prepare for your 5 years of living with an IVA. Consider cutting back on food expenses by cooking from scratch and not buying ready meals, shopping in cheaper shops and taking cheaper holidays. Make sure you are happy with what will be a simpler lifestyle.
Step 5 – IVA approved and implemented
Once your IVA is approved your practitioner will advise you on the details of the payment plane. You will have a new basic bank account opened on your behalf and a regular payment set up to your practitioner (yes, you will be able to get a new bank account under an IVA – but not one with a credit card or overdraft)
Step 6 – Sit back and get on with the next 5 years
When your IVA starts you pay your salary into your bank account as usual. A regular agreed payment is taken from your account each month by your IVA practitioner who distributes this to you creditors, leaving you with agreed amount for you to live on. All you have to do is keep control of your spending.
Step 7 – It’s over!
After 60 months of payments you will be debt free. You will be issued with a discharge certificate and you will be free to move ahead with your life with zero debt.