If you’re thinking of going into an IVA, then you’ll firstly need to find an Insolvency Practitioner as you can’t set up an IVA on your own.
Insolvency Practitioner (or ‘IP’s’ as they’re sometimes known) are authorised and regulated to act on behalf of insolvent individuals, partnerships or limited companies. They’re often qualified accountants or lawyers and must hold a licence. They will run through the IVA pros and cons, to make sure an IVA is right for you.
An IP has quite a complex role throughout the duration of an IVA since there are many responsibilities he or she must fulfil and satisfy on your behalf.
What to look for when selecting an Insolvency Practitioner
If possible, try and ask for recommendations. You could do this by approaching a local accountants or law firm if you don’t feel comfortable asking friends and family.
Most IP’s will offer an initial consultation free of charge and this is really important since it gives you the opportunity to ask as many questions as you like. Remember, if you decide to enter into an IVA then it’s legally binding for the duration (usually 4 or 5 years), so it’s important that you’re absolutely clear on every aspect of it. Another consideration, of course, is that you’ll want to work with someone you can trust since you’ll be sharing lots of private information with them throughout the arrangement term.
Think about the cost
Before choosing your IP do make sure that you’re also clear about the costs involved. Unfortunately an IVA can typically cost around £5,000.00 although most firms will enable you to pay this throughout the duration of the IVA i.e. they’ll simply deduct their fees from the monthly amount that you pay for onward submission to your creditors.
To compare costs and get the best deal it’s a good idea to shop around and do your homework. Also be very wary of IP’s who request payment up front. Although this might be offered at a discounted rate (as compared to monthly instalments), should your proposal be declined then you could find yourself out of pocket.
It’s also advisable to avoid debt management companies since many of these will charge you a fee just to refer you to an insolvency practitioner which, of course, you could easily do yourself. If you do decide to use one then make sure you’re clear on their charging structure before you commit to anything.
Making the most of your initial consultation
Once you’ve arranged to attend a consultation then it’s important to be prepared for it. Your IP will want to know full details of your income and outgoings together with details of the debts that you owe – and to whom. For this reason it’s always advisable to put pen to paper and do a full list of your outstanding liabilities. Where possible, include the date upon which you first fell into debt since some of these might be capable of being written off. Under the Limitation Act any debts over 6 years old might not have to be considered, although your advisor will tell you more about this depending on your individual circumstances.