Individual Voluntary
Arrangements (IVAs)

IVA’s were first introduced in 1986. Their purpose was to offer an alternative to bankruptcy. It is a formal arrangement with creditors to pay all or part of ones debts, over 5 years, in a properly supervised scheme. A specialist firm of Insolvency Practitioners who have vast experience in this area supervises all our IVA’s.

Procedure-

1. Prepare the proposal. This will include the following–
   1. A short history explaining why problems have arisen.
   2. List of creditors prepared, including unsecured creditors.
   3. List of assets prepared, including house, cars etc.
   4. Personal income and expenditure profile prepared, to identify affordable monthly contributions.
   5. Bankruptcy / IVA comparison prepared, to demonstrate to creditors that bankruptcy will offer them very little, and in most cases, nothing.
   
   
2. When the proposal has been finalised it is lodged in court and then circulated to creditors. The Nominee completes the lodgement in court, and no one including the debtor actually attends the court. This part of the procedure is to receive a court number. At the end of each year of the IVA, the performance must be reported back to the court.
   
3. A date for a Meeting of Creditors is set. In the vast majority of personal debt IVA’s, attendance is not required at this Meeting. It must be called at a specific time and date to allow creditors to accept or reject the offer. The majority of creditors pass the proposal to third parties to check for viability. These third parties are authorised to accept or reject on behalf of the lenders.
   
4. The vote. 75% by value of creditors who bother to vote must agree to the proposal. If the vote is not achieved the Nominee will adjourn the meeting, contact the rejecters and find out the reasons for the objection. The Nominee is impartial but may be able to represent the proposal in such a way as might make the objectors change their minds.
   
5. Supervision. After the Meeting of Creditors the role of the Nominee changes. He now becomes the Supervisor tasked with
   1. Collecting the monthly contributions.
   2. Ensuring that any change in circumstances i.e. better job therefore more disposable income is reflected in the monthly contributions.
   3. Report to the court on the performance of the IVA.

Advantages of an IVA–

1. Avoids the need for bankruptcy.
2. Avoids being disqualified either as a company director, or from a profession e.g. solicitors or accountants can enter into an IVA without impediment. However they cannot retain their professional qualification in bankruptcy.
3. IVA is normally seen as the best option. It is seen as effectively recognising past errors, while making an attempt to do the best for creditors.
4. Performing an IVA will allow for mortgage applications from some high street lenders.
5. An end to harassment.

Weaknesses of IVA-

It will appear on your credit file. However the annual report from the Supervisor confirming satisfactory performance will offset the adverse credit file mark.

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