Individual voluntary arrangements

An individual voluntary arrangement (IVA) is a deal between a person and all of his creditors. It can be supported by an order of the court and thus is legally binding

The arrangement must involve an Insolvency Practitioner (IP) acting as the supervisor and must be sanctioned by a meeting of creditors

For free initial information and advice without obligation, you can freephone 0800 068 7154

Procedures

1 The following documents are prepared and submitted to court :

» Proposals for payment to creditors

» Statement of affairs

» Affidavit supporting the application

2 The proposals are then reported on by the IP who at this point is
known as the 'Nominee'

3 An interim order can be granted by the court to stay the actions of all
creditors whilst the IVA is being formulated

4 A meeting of creditors to consider the proposals is convened at
which a 75% majority in value of creditors attending is required to
approve the proposals

5 The IVA is implemented and the funds are paid to an account held
by the IP who is now known as the 'Supervisor'

6 Creditors are repaid regularly over the term of the arrangement

Practical

A person's home can be excluded and he / she can continue to live
there for the foreseeable future. This is however dependant upon the proposals made to creditors

Future liabilities such as future rent will normally be included in the arrangement made

Secured creditors rights are not and cannot be affected by a voluntary arrangement proposal

Proposals can be based on :

» Contributions of income

» A lump sum payment

» A sale of surplus assets

..or any combination of these

There are fewer restrictions on an individual in an IVA as there are in Bankruptcy

A voluntary arrangement can be proposed whilst the debtor is still bankrupt and if the proposals are approved, the bankruptcy order will be annulled