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Tackling your debts

What documents do I need to apply for an IVA?

Posted 09 March 2016 by Shelley Bowers

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We'll ask you for some documents to support your IVA application, which include a bank statement, wage slip and statements of your debts.

If you are struggling to cope with problem debts and you’re thinking of entering into a debt solution, there are certain facts and figures that your debt advisor will ask you for in order to recommend the best option for you. So before you call up to discuss which debt solution will be the best for you, it’s a good idea to dig out the relevant paperwork. While it’s not critical that you get everything 100% accurate at this stage, how much you owe and to whom will make a real difference to the kind of debt solution you’ll be offered.

This blog will tell you what paperwork you’ll need to have on hand for an Individual Voluntary Arrangement, which is more commonly known as an IVA. This is a formally binding debt solution that allows you to reduce your monthly payments to a level you can afford and sustain, usually for a period of 5 years, after which time, you’ll no longer have to pay anything towards the debts you included in the IVA. Any remaining balances will be written off.

For comprehensive, detailed information on IVAs and when they are appropriate read our guide.

 

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Why do you need any documents?

In order for your debt advisor to advise you on the best way to tackle your debts, they need to have a complete picture of your income and expenditure as well as what you owe. This is because there are several different debt solutions available and each one has slightly different eligibility criteria, benefits and, of course, drawbacks.

So first of all, your debt advisor will check the total amount of debt that needs to be included in any debt solution and who you owe the money to – these are your creditors. They also need to ask you what kinds of debts you have – are they secured or unsecured? Secured debts are things like your mortgage or car payments, if you have them. Unsecured are other debts like your credit cards, your overdraft, storecards, catalogue debts and so on.

As well as details about your debts, the advisor will also need to see the details of your incomings and outgoings. So that’s the paperwork for all your household expenditure, including any regular payments that you need to make, including wage slips, rent or mortgage agreements, food bills, utility bills and so on. It might be useful to have a couple of bank statement to go through, you may spot something you’ve forgotten about.

If you’re not sure whether your debt is secured or unsecured, just ask the debt advisor, they’ll be able to help you. 

At DAC we also have the facility to check your credit file for you. This means we’d be able to see what debts you have outstanding quickly and easily. If you’d like us to do this for you, just give us permission when you call and speak to us.  

Once the advisor has all the details of you incomes and outgoings and the number, size and type of debts you have they can advise on the best way forward for you. At this stage, however, it’s not vital that you have accurate figures for what you owe, ballpark would be okay. In the initial stages of the process being completely accurate with this information is not necessary, but if you decide you’d like to enter into the debt solution suggested by the debt advisor, you’ll have to provide full and accurate details for each of your creditors and debts.

What documents do I need for an IVA?

If an IVA is the right solution for you and you decide to proceed then the team at your Insolvency Practitioner will put together your detailed IVA proposal.  Ultimately this will be sent to your creditors and they will need to agree to it.  At this stage a lot more documentary proof will be required.

So, as a start, you would be expected to provide details of the following:

Documents showing your debts:

proof of mortgage payments, if you own a house.

unsecured debt statements or credit agreements – so we know how much you owe on things like your credit or store cards, overdrafts, personal loans and any other unsecured debt you have

HP (Hire Purchase) agreements – the most likely HP debt to have is a car loan

Documents showing your income:

wage slips, benefits slips, tax credits or pension documents

details of income from savings

documents showing how much income you receive from any other source

Documents showing your expenditure – these can include the following:

mortgage or tenancy agreement

bank statements

utility bills

council Tax bill

life insurance or buildings and contents insurance policies

car insurance policy

HP Agreement or loan repayments for your vehicle

medical expenses

details of pet costs/vet bills

details of childcare costs

details of loan repayments for a car

 

 

 

 

We’ll need to see these documents to verify them. Don’t worry, though we’ll provide you with pre-paid envelopes, or you can simply email images of them to us.

 

 

What should I do if some of my paperwork is missing?

 

If you happen to be missing some paperwork, you can always log into your credit files, using one of the credit reference agencies Equifax, Experian or Callcredit. Or, with your permission, we can do this for you. Your credit report details all the people you owe money to, how much is outstanding and, if and when you’ve missed payments. Alternatively, you can contact your creditors and ask them for confirmation of the details of your accounts with them. This is a little more of a long-winded way of going about things, and might not be something you want to do if you find speaking with your creditors stressful, but it is a way to find out your current situation.

If you think that your debts are becoming unmanageable it’s best to speak to someone before you start to miss payments on a regular basis. You can contact out debt advisors using the links of the left of the page. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

by Shelley Bowers

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.