Individual Voluntary Arrangements - (IVA's).

What is an Individual Voluntary Arrangement?

An Individual Voluntary Arrangement is an alternative to Bankruptcy, by which a person settles with their creditors on such conditions and terms as may be agreed.

With the assistance of a Licensed Insolvency Practitioner you will put forward a set of proposals to your creditors. Your creditors consider these proposals at a Creditors' Meeting ; and if they approve them; then they cannot make you Bankrupt or take any other legal action against you as long as you honour your side of the agreement. Prior to this, it may be necessary to apply for an Interim Order, which will prevent legal action through the Courts, including proceeding with any Bankruptcy Petition, which may already be in existence. We will assist you with all applications should a Interim Order be required.

An IVA enables both you and your creditors to benefit from you not being made bankrupt. It enables you to continue in business without severe restriction or damage to your reputation.

The main features of an IVA which need to be considered are:

1. The Duration - how long you propose that the IVA should last.
   
   
2. Voluntary contributions - how much you can afford to pay each month (or by such other means) towards your creditors in the IVA. Also, is there a third party willing to pay a lump sum into the IVA, which the creditors would not get in a Bankruptcy.
   
   
3. Costs - in an IVA , the only major professional costs are for the Nominee and the Supervisor. The Nominee is the Licensed Insolvency Practitioner responsible for calling and chairing your Creditors' Meeting. The Supervisor, usually the same person, is the Licensed Insolvency Practitioner responsible for overseeing your IVA once it has been agreed. The Nominee's costs and the Supervisor's costs will come out of the IVA (i.e. you do not pay them separately) and will be considerably less than the costs of a Bankruptcy, so your creditors will receive more.
   
   
4. For a guide to fees these can be found in the Statement of Insolvency Practice (SIP) No.9 go to http://www.r3.org.uk/publications/?p=80