Is An IVA The Right Debt Solution For You?

Everyone has heard of Individual Voluntary Arrangements these days. After all they are heavily advertised on daytime tv and daily newspapers. Often abbreviated to IVAs, they offer people in debt a possible alternative to going bankrupt. So how, you might wonder, do you know whether an IVA would be a good solution for you?

One word of caution here before we even get started…there is a further alternative nowadays called a Debt Relief Order (DRO) and if you have debts below £20,000 and not much in the way of assets (no assets really) and no surplus income then you should probably look at a DRO first. They are cheaper at just £90 and you are in and out of it in 12 months.

If your debts are greater than £20k, or you have assets, or you have some monthly surplus income then it may be that you need to consider entering into an IVA and avoid the alternative that you might be facing of bankruptcy.

The main feature of an IVA is that it is generally a 5 year Arrangement with your creditors during which you will make 60 monthly payments into the IVA for your creditors. If you own your own home and there is equity in the house then you might need to arrange a remortgage to release some of the equity or as is often the case, extend the period of the IVA in lieu of the equity in the property.

We shall give you one very good piece of advice which was passed to us by some specialist personal insolvency advisor contacts of ours who work with IVA companies in Liverpool and all over the north-west. Take great care when preparing your income and expenditure account. In fact prepare it before you even get on the phone to an IVA firm. No-one knows your income and expenditure better than you do and preparing it carefully in advance will help ensure that the IVA company has a full and accurate set of figures. This is VERY IMPORTANT!! The Insolvency Practitioners will use it to work out what you can afford to pay each month in your IVA. We understand that a number of people enter into an IVA with very little care and attention paid to true affordability. It is all very well getting an IVA agreed but if you can’t afford the  monthly payment, the IVA may fail and you will be exposed to possible actions against you by your creditors.

Be careful picking your IVA company as well. Make sure you are comfortable with them when you speak with them and that you are happy with the advice and service they are providing to you. Unfortunately, some IVA firms are better than others. You may want to be especially careful if you are self-employed as some IVA firms often lack the required expertise in dealing with such cases. Don’t hesitate to shop around and ask lots of questions. IVAs last a long time and you want to be sure that you will be working with a firm that you are going to be happy with over a 5 year period.

Choosing The Best Liverpool Insolvency Practitioner

A licensed insolvency practitioner not only liquidates failed companies, he also rescues struggling businesses and saves jobs. In fact insolvency practitioners tend to prefer to associate themselves with the whole culture of rescue, recovery and turnaround rather than be known as corporate undertakers.

Specialisation

If you are looking for help with a failing business, whether it be a limited company or a small sole trader business, you need to bear in mind the kind of help you need. This is why choosing  insolvency practitioners Liverpool carefully is crucial. Some specialise in personal insolvency and act as trustee in bankruptcy or supervisor of an Individual Voluntary Arrangement (IVA). Others spend most of their time liquidating small to medium sized limited companies whilst others focus on helping struggling companies to turnaround their fortunes and get back into profit.

Licensing

Your insolvency practitioner needs to be licensed. This is a formal legal requirement as per the Insolvency Act 1986. Licenses are issued by professional bodies and unlike other professions where there may only be one professional licensing body, insolvency has a number of different bodies authorised to issue licenses to insolvency practitioners. The following are the main bodies who issue such licenses:
Insolvency Practitioners Association
Association of Chartered Certified Accountants
Institute of Chartered Accountants in England and Wales
Institute of Chartered Accountants of Scotland

Presently, licenses cover both personal and corporate insolvency allowing all license holders to deal with insolvency procedures for both companies and individuals. The situation is in the process of change and separate licenses will be issued enabling insolvency practitioners to specialise in either corporate or personal insolvency.

Experience

Insolvency practitioners Liverpool (IPs) in the UK are often qualified accountants. Indeed, you will see from the licensing section above that the professional accounting bodies issue licenses to act as insolvency practitioners. Insolvency procedures are strictly driven by law and it is not uncommon for solicitors to qualify as licensed insolvency practitioners as well. Therefore most IPs have some prior professional training, experience and qualifications in accounting or law prior to entering the insolvency profession. That is not a prerequisite though and many Ips specialise in insolvency right from the start of their working lives.

Qualifying as an IP

It is necessary to pass a set of professional examinations and have a certain number of hours working in the profession before you can be issued with a license. Presently 3 exams must be passed as follows:
Liquidations
Administrations, Company Voluntary Arrangements (CVAs) and Receiverships
Personal Insolvency
The examinations are notoriously difficult and widely considered amongst the most difficult professional examinations of all.
Presently, aspiring IPs must pass all 3 examinations. In the future the exam structure will change a little to suit the needs of people who wish to specialise in personal insolvency or corporate insolvency.

The best Insolvency Practitioner for you

It is suggested you choose your IP carefully and make sure that they have the requisite level of experience suited to your needs. A personal insolvency specialist, for example, will not be the best choice if you need to liquidate your company. Don’t be afraid to ask the IP whether he has dealt with a similar situation to yours before so that you know you are in the right hands.

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