What is the role of an insolvency practitioner in an IVA?
The Insolvency Practitioner (IP), usually a qualified accountant with expertise in insolvency law, is an integral part of the IVA process. They’re the catalyst for the entire operation dealing with everything from drafting your IVA proposal to supervising your repayments. They aim to deal with cases efficiently and professionally, so all creditors are paid and you can get on the road to becoming debt free.
Discussing your financial situation
First of all, the IP will nominate you for an IVA if you qualify. They will interview you about your current financial situation. This includes your regular income, any assets or cash you may have, as well as your outgoings. The IP will usually ask you to detail your ‘essential expenditure’ which consists of necessities such as rent, mortgage, gas, electric, water, food and travel costs. They will work out your disposable income, or how much money you have to pay towards your IVA per month, as well as talk to creditors to get all the correct information.
Drafting up the proposal
Your IP will draft up the proposal and send it to you so you can make any suggestions or amendments within reason. Once you’re happy with the proposal, the IP sends it to the creditors usually just over 2 weeks before the proposed Meeting of Creditors date.
Meeting of Creditors
As chairperson of the Meeting of Creditors, your IP ensures all creditors vote according to the correct procedure. The outcome will be either approved, rejected or adjourned for further discussion. An IP can adjourn the meeting and set up another one if creditors aren’t coming to an agreement. But the main skill an IP has in the meeting is the power of negotiation – they can persuade creditors to accept a reduced repayment for your debts.
Supervising the IVA
If the IVA is confirmed then the IP is in charge of keeping an eye on your repayments. They also make sure everyone adheres to the terms of the IVA. Essentially, they supervise the entire IVA process including:
- Annual reviews
- Checks to see if any adjustment are needed, such as salary increases/decreases, bonuses, windfalls, etc.
- Assess your assets and organise a valuation if needed so you can sell them
- Make sure creditors don’t contact you
- Prepare all paperwork and give you a discharge certificate once your IVA terms are over