Can a creditor take further recovery action before the IVA is approved?

Recovery action can be taken before IVA approval

We receive a lot of calls and emails from the public asking; "Can a creditor take further recovery action before the IVA is approved? ".

A creditor can take further action against you before the IVA is approved. This is quite rare, however if a creditor is being aggressive then an 'Interim Order' can be applied for from the courts.

An interim order prevents your creditors from presenting or proceeding with, a bankruptcy petition against you while the interim order is in force. It also prevents them from taking other action against you during the same period without the permission of the court. The court cannot make an interim order if you have applied for one in the previous 12 months.

An Individual Voluntary Arrangement (or IVA) is an official debt repayment plan that includes the freezing of interest, reduction in the total amount of debt owing, and legal protection from creditors as long as the terms of the IVA are adhered to.

An IVA offers legal protection from creditors as long as the terms of the IVA are adhered to.

An Individual Voluntary Arrangement (IVA) is an agreement with your creditors to make a single reduced payment each month. This lasts for an agreed period of time. Once agreed, creditors are not allowed to add interest or charges to your accounts by law. The agreement is fixed meaning that creditors cannot randomly demand changes to it.

An IVA offers solid legal protection from creditors, so long as you abide by your payment plan. For many people they can be a life saver and often signal the end of a difficult period in their financial lives.

An IVA gives you an opportunity to avoid bankruptcy. If it is not approved, a creditor may bankrupt you. It follows that you should put forward the best offer you can to your creditors. Be completely open and honest with your IP and the creditors about your financial circumstances.

How do I start an IVA?

You complete and return our standard application form together with copies of all recent bank statements. We will then discuss areas with you such as what the costs of the IVA are.
On receipt of your questionnaire one of our consultants will contact you in order to talk through your application. At this juncture we will discuss whether to choose bankruptcy or an IVA. We can also talk to you the IVA criteria.
If our case meets our standard criteria you will accepted onto the Individual Voluntary Arrangement - IVA programme and referred to one our panel members. At this juncture we will provide you with all the help and advice you need in order to start an IVA
The panel member will now act for you and will then contact all your creditors informing them that they are now your legal representative. At this juncture we can always answer questions on how does an IVA work.
Based on the information provided by you an Individual Voluntary Arrangement - IVA proposal will be draughted , this is a written agreement which sets out the actual terms of the Individual Voluntary Arrangement - IVA.
In order to legally protect you from your creditors a form of legal protection called an "interim order" is granted. This is a process which enables full protection from your creditors.
Once the Interim Order is granted no legal action may be bought against you. Having an interim order means you are fully protected from creditors issuing or continuing bankruptcy proceedings.
The panel member then prepares a statement called a "Nominees Report" which portrays a professional opinion as to whether the Individual Voluntary Arrangement - IVA is a bonafide offer.
Shortly afterwards a meeting of creditors is held. In theory this meeting consists of all the creditors gathered in a room to discuss the Individual Voluntary Arrangement - IVA. In practice, however, creditors rarely attend because all voting is done prior to the meeting.
Once the Individual Voluntary Arrangement - IVA is approved you are legally contracted to keep up your monthly Individual Voluntary Arrangement - IVA payments. Once accepted your creditors can never bother you again. This monthly payment will be easily affordabe because it is based on your disposable income

If you wish to discuss if a creditor can take further recovery action before the IVA is approved and understand how it can help you please complete the following form or telephone freephone 0800 074 6918.

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IVA's

The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.

In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]

What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
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Can a creditor take further recovery action before the IVA is approved?

Recovery action can be taken before IVA approval

How do I start an IVA?

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