IVA vs R3 IVA Terms

Question 1

Protocol: What are the Breaches?

Answer 1

1. 3 missed contributions (9 months in total)
2. Debts > 25%
3. False / Misleading Info
4. Non - compliance
5. Obtaining credit >£500 (Not utilities or insurance)
6. Not reporting income >10% within 14 days of receipt or paying 50% over within 14 days disclosure

Question 2

Protocol: Extension

Answer 2

Can be extended up to 12 months

Question 3

Protocol: Redundancy Pay

Answer 3

Over 6 months must be paid to supervisor

Question 4

Protocol: Breach Remedy Timings

Answer 4

Notice of breach issued giving 1 month

Question 5

Protocol: Monthly Contributions Allowed Reduction

Answer 5

15% allowed to reduce without variation

Question 6

Protocol: Retain petition funds?

Answer 6

No

Question 7

IVA and R3: How many creditors needed to convene a decision procedure (to remove supervisor)?

Answer 7

25%

Question 8

Protocol: When can claims be admitted?

Answer 8

£2k or less or
not more than 120%
Creditors must submit POD within 2 months and cannot disturb previous dividends

Question 9

Protocol: What happens with unclaimed dividends?

Answer 9

Paid to creditors after 4 months

Question 10

Protocol: When is Protocol suitable?

Answer 10

1. Regular income (inc. pension)
2. Several lines of credit
3. Debts >£5k
4. No investment properties
5. Consumers who do not meet the criteria for DRO
6. No lump sum settlements
7. No sole traders with trade debts
8. Uncomplicated assets
9. No disputed debts

Question 11

Protocol: What must be disclosed to creditors?

Answer 11

1. IP involvement
2. IVA in last 2 years
3. DRO/DMP/BO/BRU/BRO
4. Source of Referral and any payments

Question 12

Protocol: How should income and expenditure be considered?

Answer 12

In line with the Standard Financial Statement and any deviations disclosed

Question 13

Protocol: Pension contributions allowed

Answer 13

<55 years min. pension allowed
>55 average of previous 6 months.
Max £75 per month

Question 14

Protocol: Home & IVA length

Answer 14

Home <£5k - 60 months
Home >£5k - 72 months
Home >5k - 60 months plus equity

Question 15

Protocol: Remortgage Terms

Answer 15

• 85% LTV max
• Cost increase no greater than 50% of monthly contributions
• Cannot go beyond retirement age or existing borrowing

Question 16

R3: Extension

Answer 16

2 x 6 months and then 3 months
Notice given at least 7 days before termination

Question 17

R3: Certificate of Full Implementation

Answer 17

Can be given even if full terms not met, as long as all contributions made and breaches explained.

21 days given to creditors for their comments

Question 18

R3: When can IVA be terminated?

Answer 18

1. Notice of termination issued
2. BO
3. Death

Given 28 days after event

Question 19

R3: When are creditor claims admitted

Answer 19

When £1k or less

Equalising dividends are allowed

Question 20

R3: Unclaimed Dividends

Answer 20

Paid to debtor
(Creditor can pursue debtor)

Question 21

R3: Breach conditions

Answer 21

1. Fail to comply with IVA terms
2. False / Misleading Info
3. No Co-operation

Question 22

R3: Breach Remedy

Answer 22

1 month + 1 month at supervisors discretion

Question 23

R3: No remedy

Answer 23

Vary / Petition / Notice of Termination

Question 24

R3: Retain funds for BKY petition?

Answer 24

Yes