The role of the IVA Nominee.
For those people who are considering an IVA as a solution to a serious debt problem, there's a possibility they'll hear of the 'IVA Nominee' whilst their research.
So, here's a brief explanation of what an IVA Nominee's role is within the IVA process.
Who Is The IVA Nominee?
The 'IVA Nominee' is the name given to the role played by the Insolvency Practitioner in the period preceding the Creditors' Meeting.
The Insolvency Practitioner becomes the Nominee when they receive an official letter of engagement from the applicant, normally one of the first things the applicant is required to provide.
The role of the nominee is potentially a short lived role, so long as the IVA is agreed, because once the IVA has been accepted by creditors, the Insolvency Practitioner changes roles again to that of IVA supervisor.
During the time before the Creditors' Meeting the Nominee acts on behalf of the applicant to prepare the IVA proposal.
Here are a few of the duties the Nominee has:
- Appointing the Nominee.
The Nominee is appointed when an applicant returns a notice of 'instruction to act', stating they wish to nominate the Insolvency Practitioner to act on their behalf by applying for an IVA.
- Oversee the preparation of the proposal.
The Nominee ensures the IVA proposal represents an open and transparent account of the applicant's financial situation. The Nominee is tasked with ensuring the information within it has been verified and is correct.
- Assessment of assets.
The Nominee ensures the applicant will conform with their obligations relating to any assets for inclusion in the IVA, for example equity in a property, endowment policies or savings.
- Verify the IVA budget.
The Nominee will verify the applicant's income and expenditure and confirm the proposed budget generates an affordable IVA payment which is fair to all parties.
- Stop preferential treatment.
The Nominee will provide advice on how to handled creditors in the period before the IVA Creditors' Meeting. The Nominee will advise that no preference is shown to any one creditor which could prejudice the IVA.
- Correspond with creditors.
The Nominee will deal with the creditor correspondence. This can involve dealing with collection agencies and court proceedings. The Nominee will consider whether an Interim Order is required to stay any legal proceedings that may impact on the IVA.
- Bankruptcy comparison.
The Nominee will provide a comparison statement to creditors of the likely return in the event of the applicant's bankruptcy to act as a comparison to the offer laid out in the IVA proposal.
- Projected dividend.
The Nominee will provide an estimate of the funds to be distributed to the creditors on the approval of the IVA.
The principle of having a Nominee works well within the IVA process.
By creating an official role for the Insolvency Practitioner to oversee the preparation of the IVA, creditors would struggle to question the validity of the content of the proposal.
The Nominee brings a level of authority to the IVA process that adds clarity and confidence for the creditors. They know the Nominee has checked out and verified the information in the proposal, saving them the need to do the same.
If you're considering entering an IVA and would like to have a chat with an IVA specialist, simply call 0800 088 7502 now. Or, if you'd prefer you can complete this form and one of our advisers will contact you at your preferred time.
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