How do people I owe money to get their money and what are dividends?
The essence of an IVA proposal is that the debtor puts forward whatever they can afford in order to repay people they owe money to. This means that the funds that need to be contributed into the IVA will vary on a case-by-case basis depending on what assets the individual has, and how much money they can afford to put towards their finances each month (i.e. monthly income minus monthly expenditure).
Once the IVA is approved, the Insolvency Practitioner (IP) will take on the role of Supervisor for the five-year period. This will mostly involve ensuring that the monies are handled correctly and that the appropriate payments (or dividends) are made to people you owe money to.
Funds are not distributed on a monthly basis, as people you owe money to prefer to receive lump-sum payments, which are normally paid in the form of an interim dividend when there is £5,000 or more in the IVA account. A final dividend is then made to people you owe money to immediately prior to the closure of the IVA to distribute any remaining funds. As part of the closure process, once empty, the IVA account is then closed.
