Individual Voluntary Arrangements

An Individual Voluntary Arrangement - IVA is a formal contract or arrangement between you and your creditors where you will come to an agreement with people you owe money, to make reduced payments towards the total amount of your debt in order to pay off a percentage of what you owe. This is the main purpose of IVA. Generally after 5 years your debt is classed as settled.  Due to its formal nature, an Individual Voluntary Arrangement - IVA has to be set up by a licensed professional called an Insolvency Practitioner (IP).

Based on your income and affordability, you can arrange for monthly payments to clear the arrears. This can be done within a reasonable and fixed period of time (normally 5 years). Any interest and debt charges will be frozen and creditors will be forbidden from demanding additional payments. Once the final payment is made, any outstanding debt is legally written off. The arrangement can write off up to 65% of your debts (subject to your circumstances).

How does IVA work?

In IVA there are three parties involved and they are,

• Debtor (You)
• Creditor (People you owe money to)
• Nominee (Your Insolvency Practitioner)

Legal terms,

• Interim Order (An order to the creditors not to take any actions until a meeting between the two parties has been arranged)
• Proposal (A proposed payment plan)
• Statement of Affairs (A list of your assets and liabilities)

The nominee or your Insolvency Practitioner of this process will draw up a proposal to be presented to the court in order to get an Interim Order. Once the Interim Order has been acquired, it will be circulated to the creditors along with the following information.

• Insolvency Practitioner's comments on your proposal
• The proposal itself
• A notice of the meeting date in order to get votes on the proposal from the creditors
• A list of all your assets and liabilities, also called the Statement of Affairs
• A list of creditors
• A guide to the fees charged by the Nominee

The meeting of creditors is held within 14 working days of the circular being sent out. The purpose of this meeting is to give the creditors a chance to vote on whether they want to accept or reject the debtor's proposal; or whether they want to make any amendments to the proposal.

On acceptance of the proposal a supervisor will be appointed to the arrangement, this is usually the nominee. The supervisors role will be ensure the proposal is being adhered to and that payments are distributed to the creditors as agreed. Once both parties agree to the terms and agreements of the arrangements, the debtor is usually discharged from all liabilities included within it.

Please be advised that this documentation is for information purpose only and is not legal advise

Why use us to set up your IVA?

If you have debts over £15,000 than our Insolvency Practitioners can help you by proposing an IVA plan for you. Our Practitioners are industry regulated with many years experience in dealing with people like yourselves. We believe in providing honest, professional and reliable service. Fill out our online no obligation enquiry form to arrange a callback from one of our specialist Insolvency Practitioners. They will be happy to listen to you and devise a plan that is best suitable for your situation.