Individual Voluntary Arrangements (IVA)

An Individual Voluntary Arrangement, or IVA, is a legal agreement between you and your creditors to repay your debts to the best of your ability based upon your individual circumstances.  While there is no set percentage as to the amount you must pay back, the amount is usually less than your total amount of debt. An IVA can be a useful tool therefore for individuals who are currently in financial difficulty, which often results in some of your debt being written off, whilst usually still offering creditors a better return than bankruptcy.

If your IVA Proposal is agreed by your creditors then they are all legally bound by it.  This means that they are unable to take legal or enforcement action outside of the IVA; thus allowing you to deal with your debt, usually by way of one regular monthly payment.  You should be aware however that an IVA will only deal with your unsecured creditors and not secured creditors, such as your mortgage company.

Approval of an IVA

In order for your IVA to be approved 75% of the creditors who vote must vote to approve it.  Therefore, if only one creditor chose to vote and they voted to approve the arrangement, then on the day 100% of the creditors who voted would have voted to approve the proposal.  Accordingly the IVA would be approved and all creditors would be bound by it, regardless of whether or not they voted at the meeting. An IVA can therefore be a powerful tool for dealing with your creditors.

Different Types of IVA

There are two main types of Individual Voluntary Arrangement Proposal, as follows:

• A monthly payments IVA, whereby a set monthly sum is paid for a set period of time to allow a dividend to become payable to your creditors, usually over a three to five year period and
• A lump sum IVA, whereby a lump sum (be it a re-mortgage, family members' contribution) is paid into the IVA to allow a dividend to become payable to your creditors.

Individual Voluntary Arrangements are incredibly flexible and can be used to put forward a wide range of proposals to creditors, which are tailored to your individual circumstances.

For further information in respect of Individual Voluntary Arrangements please follow the links on the menu situated on the right hand side of your screen.

It is always important to seek professional advice before taking any action and in particular it is important to ensure that the advice you are receiving is provided by an Insolvency Practitioner, who is licensed and therefore regulated by a Professional Body.  Any Licensed Insolvency Practitioner will provide you with expert advice on all of your options, giving you the pros and cons of each and every option. You will then be able to make an informed decision as to what action you wish to take.

If you would like to have a free face to face or telephone meeting with a Licensed Insolvency Practitioner to discuss your personal circumstances and ascertain whether an Individual Voluntary Arrangement (IVA) is right for you please contact us on 01326 340 579.

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