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Overview of Individual Voluntary Arrangements

What is an Individual Voluntary Arrangement

An Individual Voluntary Arrangement (IVA for short) is a legally binding agreement between a debtor and creditor. It enables the debtor to come to a formal debt repayment arrangement with his or her creditors.

An Individual Voluntary Arrangement usually allows the debtor to only repay a percentage of his or her debt over an extended period of time. It is not unusual for a debtor to only have to pay back 25% of the original debt.

Who Does an Individual Voluntary Arrangement Benefit

The government introduced the Individual Voluntary Arrangement in 1986 as an alternative to bankruptcy. Avoiding bankruptcy is in the interests of both the debtor and creditor.

From the creditor’s point of view, an Individual Voluntary Arrangement is attractive owing to the high fees associated with bankruptcy. Furthermore, unless the debtor has significant assets there is often not much left for the creditor after bankruptcy proceedings have been completed.

From the debtor’s perspective, an Individual Voluntary Arrangement is also a better option than bankruptcy. Unlike with bankruptcy, an Individual Voluntary Arrangement lets the debtor have a say in how his or her assets are dealt with and how debt re-payments are made.

An Individual Voluntary Arrangement also enables the debtor to avoid some of the restrictions that apply to bankruptcies, and the overall costs are lower.

How Do You Set Up an Individual Voluntary Arrangement

An Individual Voluntary Arrangement needs to be set up by an insolvency practitioner as it is a legally binding agreement.

We work with reliable insolvency practitioners who can help you set up an Individual Voluntary Arrangement.

Click here to apply for an Individual Voluntary Arrangement

Alternatively, if you would like to speak to an independent Individual Voluntary Arrangement advisor for further information, then please:

 

a) Call us on freephone 0800 138 5445

or

b) Fill in this short form and an Individual Voluntary Arrangement advisor will call you back at a time that is convenient to you

The Individual Voluntary Arrangement Process


Once you have contacted an insolvency practitioner and decided that you want to set up an Individual Voluntary Arrangement :

  1. The insolvency practitioner will prepare an Individual Voluntary Arrangement proposal. This will contain details of your financial situation, assets and liabilities; and how you suggest dealing with your creditors.

  2. Once the Individual Voluntary Arrangement proposal has been completed, an Interim Order is filed with the court. When the Interim Order has been filed, your creditors are prevented from issuing bankruptcy proceedings against you until they’ve decided whether to accept or reject your Individual Voluntary Arrangement .

  3. The insolvency practitioner then circulates a Nominee’s Report which gives a professional opinion about the Individual Voluntary Arrangement being proposed and whether a creditors’ meeting should be called.

  4. The creditors hold a meeting to discuss whether to accept or reject the Individual Voluntary Arrangement . A vote of 75% in favour is needed to accept the Individual Voluntary Arrangement . If they decide to accept the Individual Voluntary Arrangement , they are legally bound to do so.

  5. A Supervisor is appointed by the creditors to administer the Individual Voluntary Arrangement and to ensure that the creditors get paid according to the agreed terms.

Advantages of an Individual Voluntary Arrangement

  • An Individual Voluntary Arrangement allows you to only pay back an agreed percentage of your debts

  • It is illegal for your creditors to harass you whilst an Individual Voluntary Arrangement is in place,

  • An Individual Voluntary Arrangement doesn't affect your professional status or your ability to hold public office

  • Interest on your loan is frozen which means that your debt won't keep growing if you set up an Individual Voluntary Arrangement

  • You are allowed to have a regular bank account so long as it doesn’t have an overdraft facility

How Much Does an Individual Voluntary Arrangement Cost

Our insolvency practitioners will not charge you to set up an Individual Voluntary Arrangement.

Most insolvency practitioners take their fees from the Individual Voluntary Arrangement fund that is paid to your creditors.

Therefore if you set up an Individual Voluntary Arrangement with us, you will not have to pay more than the monthly payment that you have agreed with your creditors.

In other words, it is your creditors, not you, who are paying the insolvency practitioner’s fee.

For more information about IVA costs please:

a) Call us on freephone 0800 138 5445

or

b) Fill in this short form and an IVA advisor will call you back at a time that is convenient to you