Glossary of terms


Terms you may encounter with us.

Here follows a list of commonly used terms that you may encounter if you are looking to enter into or if you are already subject to, an Individual Voluntary Arrangement. We have provided an explanation of each of the terms to make understanding the process easier and more straight forward.  We will happily provide further explanation, should you require.


​Initially, the role of the Insolvency Practitioner will be one of an advisor, assessing your financial position and providing advice based on your best interests (although taking into account what is likely to be acceptable to your creditors).  If you decide to proceed with an Individual Voluntary Arrangement, the Insolvency Practitioner and the staff at Vanguard will draw up the necessary documentation based on the information that is obtained from you or elsewhere to present proposals to your creditors. ​


The Insolvency Practitioner becomes the “Nominee” if you decide to go ahead with an IVA, but this only happens once you have signed and returned the formal paperwork. The Nominee will have a duty to perform an independent, objective review and assessment of the Proposal, and to provide your creditors with an opinion on your Proposal.  The Nominee must also attempt to ensure that your interests are balanced against those of your creditors.  The Insolvency Practitioner must remain independent in their role as Nominee. ​


Once an Individual Voluntary Arrangement is approved, the Insolvency Practitioner’s role changes again.  Upon acceptance of the Arrangement, the Insolvency Practitioner becomes the “Supervisor” of your Individual Voluntary Arrangement. The responsibilities of the Supervisor are mainly governed by the terms of the Arrangement and the Supervisor is required to act in a manner that is fair to both you and your creditors.  The primary role of the Supervisor is to ensure that the terms of the Individual Voluntary Arrangement are carried out.


Your credit rating may be affected by entering into an Individual Voluntary Arrangement. Entries on your credit report will remain visible for 6 years. You can expect creditors to report your Arrangement with the credit reference agencies at the date that your Arrangement is approved and potentially afterwards. The entries on a credit report are very much a matter between you and your creditors.  We do not liaise with creditors, nor do we add, amend or delete entries on a credit report. The details of an Individual Voluntary Arrangement are entered on a central database held by the Insolvency Service (part of the government).  This database is available to search and view for free on the internet.


This is where you have fully complied with all of the terms of your Individual Voluntary Arrangement.  A final report will be sent to you and your creditors together with a Certificate of Completion, confirming the position.  At this point creditors will write off any remaining unsecured debt that was included in your Arrangement.  This process is legally binding on the creditors.


The period that your Individual Voluntary Arrangement will last is very much dependent on your personal circumstances. Most Arrangements will be proposed for a five year period. This may be extended by a further twelve months if you have equity in your property.  Please see the “Equity” definition in this document for further details.  Sometimes your Arrangement will be extended to allow additional funds to be paid in.  This will usually be done in agreement with you and your creditors.


It may be that there is an opportunity to bring your Arrangement to an early conclusion.  This will normally be the case if a family member or a friend is willing to offer funds in place of those contained within your Arrangement. Whilst we will look at all offers, we will normally only proceed with the process if the offer is likely to be accepted.  Providing this is the case, we will arrange a meeting of your creditors to try and obtain creditor agreement.  Providing creditors agree, your Arrangement will be completed.


This is the market value of an asset, less any outstanding finance.  Examples of such assets include a car on HP or a house with a mortgage.  If you own your own home, you can still enter into an Individual Voluntary Arrangement.  You may be required to raise funds by way of a re-mortgage at the end of the Arrangement.  If you cannot raise such funds, your Arrangement will normally be extended and you will have to pay in additional contributions for a further 12 months.


All fees and costs are taken from the money that you pay into your Arrangement. We do not charge you directly and you will not be asked to pay anything in addition to the funds that you agreed to pay as part of your Arrangement. ​


The Nominee’s fee is charged to cover all the work which is done up to the time your proposal is approved.  This includes the preparation of your proposal and holding a meeting of creditors. The fee is normally fixed and must be approved by your creditors.


The Supervisor’s fee is charged to cover the work involved in administering the Arrangement once it has been approved by the creditors. This will normally be a percentage of the amount paid into your Arrangement and this must also be approved by your creditors. ​


There are expenses which are paid for the administration of the Arrangement and include third party items such as registration fees, case management fees, software and maintenance fees, statutory items, insurance bonds and internal costs such as postage and stationery which the Insolvency Practitioner must pay.  Creditors may request that fees are amended as a condition of them approving the Arrangement. This is quite normal.


​ At Vanguard we take our responsibilities around protecting your data very seriously.  Firstly, we will never sell or provide your data to a third party.  We will only collect sufficient information to carry out our statutory obligations.  We hold your data securely and delete any information that is no longer required.  The firm and the Insolvency Practitioner are both registered with the Information Commissioner.  Full details of the policy are set out in our privacy policy.


It is usual for the terms of an Individual Voluntary Arrangement to include an annual review of your financial position.  If there is surplus income and contributions can be increased, this will be set out to you at the review stage.  There is always a built in safety net to ensure that any increase is affordable.


​These are the payments made by you during the term of the Individual Arrangement. These are calculated from a review of your income and expenditure.  These amounts, together with any other funds that come into the Arrangement, are paid to your creditors after deduction of any fees due.


There are a number of publications available that you can use before you enter into an IVA to help make sure that you get the right advice.  These are independently produced.  These can be found at: ​


A legally binding agreement between you and your creditors where you agree to make regular contributions from your income and sometimes to sell surplus assets not required for your basic domestic needs. The funds are paid to your creditors in full and final satisfaction of your unsecured creditors. The appointed Insolvency Practitioner will oversee the Arrangement and ensure that all matters are dealt with properly.  At the successful conclusion of the Arrangement the creditors involved will write off any unpaid balance. ​


This means that you are unable to pay your debts as they fall due or that your debts are greater than your assets.


​These form the primary legislation which governs how Individual Voluntary Arrangements are set up and operated. The Act and the Rules provide the legal backing to the process.


A person licensed and authorised to act in an insolvency process such as an Individual Voluntary Arrangement is known as an Insolvency Practitioner.  The Insolvency Practitioner is regulated and inspected by a regulatory body.  In the case of Vanguard the regulatory body is the Insolvency Practitioners Association.  An Individual Voluntary Arrangement cannot be proposed or agreed without the involvement of an Insolvency Practitioner.


In order for an Individual Voluntary Arrangement to be approved, it must be voted upon by the creditors involved.  This is done at a meeting of creditors.  Such meetings are done by way of a virtual meeting and no one is required to attend.  Sometimes creditors want to modify the terms of a proposal.  This can only be done with the full agreement of the client.


A statement supplied by the mortgagee/lender showing the amount required to redeem a mortgage as at a particular date. This will help assess the equity available in your property.


As part of the terms of the Arrangement, your Supervisor will pursue claims for mis-sold PPI and other financial products, on your behalf.  Any sums received will be paid into your Arrangement for the benefit of your creditors. Any costs incurred will be paid from the funds held in your IVA or from realisations made.  You will never be liable for any costs or fees in this regard. There has been recent case law which states that any PPI or indeed other assets which form part of the Arrangement must be paid to the Supervisor even after the IVA has finished. In all cases where such funds are received, the money will be distributed to your creditors, subject to the deduction of properly authorised fees and costs.


Payments of funds due into the Arrangement can be made in a number of ways.  We encourage monthly contributions to be paid by way of standing order.  This means that you retain control of the payments that you make.  It also means that payments will not generally be missed which is an important part of ensuring the successful implementation of the Arrangement.  Payments can also be made by direct bank transfer, a cheque made payable to Vanguard Insolvency Practitioners or by way of a card payment.  We understand that sometimes mistakes occur when payments are being made.  We will look reasonably at any situation that occurs. We are in full agreement with a policy of treating customers fairly. The full policy in relation to refunds of payments can be found by viewing our cancellation and refund policy.


This is the document that contains the offer to creditors and sets out how the Arrangement will work, subject to approval by the creditors. Its contents are subject to the relevant legislation as well as common law. It is a legally binding document.  We will normally prepare this on your behalf.  You will have the opportunity of reviewing and amending the document. You will need to sign your agreement to the proposal and the appendices before it is sent to your creditors. This means that you retain overall control of the process.


As soon as your proposal has been formally approved, your creditors can no longer pursue you for your outstanding unsecured debts. Assuming the Individual Voluntary Arrangement terms are fully adhered to, the Arrangement will be completed and any outstanding unsecured debt that was outstanding at the start of the process, will be written off.


Secured creditors such as HP on a vehicle and the mortgage on a property will normally be excluded from your Individual Voluntary Arrangement.  This means that you will continue to make payments to your mortgage company or the HP company and you will also retain the asset.  You will be given an allowance in your expenditure to make such payments. If the asset is sold during the Arrangement, any shortfall will be included in the Arrangement as an unsecured debt.


This is where you are unable to meet the terms of your Individual Voluntary Arrangement. Your Supervisor will issue a Final Report and a Certificate of Termination.  Creditors will then be able to pursue for any amounts that still remain outstanding.  They can also add interest that would have accrued had the Arrangement not been in place.


If your Individual Voluntary Arrangement has been approved and your circumstances change significantly, it may be possible to change the terms of your Arrangement.  To do so we will need to obtain the agreement of your creditors.  This will be done by holding a meeting of your creditors where they will vote on your revised proposals. Neither you nor your creditors will attend the meeting and we will keep you fully updated as to the outcome and the next steps required.


If you receive a windfall or inheritance during the period that your Individual Voluntary Arrangement is in force, these funds will be paid into your Arrangement for the benefit of your creditors.  The maximum that can be paid in is the outstanding amounts due to your creditors, plus fees, costs and disbursements, plus statutory interest (if it applies in your Arrangement). Any surplus will be paid to you.  Examples include but are not limited to lottery or gambling wins, bequests under a will or trust, and the drawdown of a lump sum from a pension.


Find out the right choice for you.

Call us today to speak with one of our advisors who can help you understand your options and find out the right choice for you. We're here to help on 0800 019 8383 .

Opening times

Monday - Thursday: 8:00am - 6:00pm Friday: 8:00am - 5:30pm

Saturday: 9:00am - 2:00pm

Sunday: Closed

Vanguard Insolvency Practitioners Limited, Registered address National House, 80-82 Wellington Road North, Stockport, Cheshire SK4 1HW

Company Registered in England and Wales Number 09610770 - Data Protection ZA 131723

Peter Jackson is authorised to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association. Data protection registration number ZA103596

The Money Advice Service is a free service set up by the Government to help people make the most of their money. If you would like to learn more click here. The Insolvency Service, an independent government agency, has produced a guidance leaflet on dealing with your creditors. If you would like a copy, click here.

The Association of Business Recovery Professionals, known as R3, produce a booklet called “Is a Voluntary Arrangement Right for Me?”.  If you would like a copy, click here.

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