Once your suitability for an IVA has been assessed and you’ve made your decision then your financial situation will have to be examined. A repayment proposal will then be drawn up for your creditors to vote on.

A creditors’ meeting will then be called during which they will have the opportunity to accept or decline the proposal. Neither you nor your creditors are obliged to attend this meeting and it’s common for them to vote by proxy.

Your creditors may put forward modifications or amendments to your proposal. These will be discussed with you at the time of the meeting.

After all the votes have been cast you will need to have agreement from 75% of your creditors by value. If you get this majority then your IVA can then proceed and become legally binding.

You will then be appointed a Licensed Insolvency Practitioner (IP) who will oversee your IVA and monitor your repayments. At this stage if you’re a homeowner you may have to release any equity in your home for the benefit of your creditors or be prepared to do it in year 4 or 5 of your IVA.

Your IVA will usually last for a period of 5 years. It’s your responsibility to ensure you can make the repayment every month and if your circumstances change you need to let your IP know immediately as failure to make repayments could result in you facing bankruptcy proceedings.

If you found this answer helpful you may also want to look at the following:

Will I have to go to any meetings and face my creditors?