Individual Voluntary Arrangement

Suitable for: Individual with debts
An Individual Voluntary Arrangement is a viable alternative to a bankruptcy. It is a contract between you, the debtor, and your creditors wherein the creditors will be able to recover at least a portion of the debt owed. Individual Voluntary Arrangements are very flexible and may be structured so as to exclude certain assets from the IVA Proposal.

The proposal put to creditors will be voted on at the creditors’ meeting. Generally, if over 75%, by value, of the creditors represented vote in favour, then the IVA will be approved. There are a number of ways that Individual Voluntary Arrangements can be structured in order to maximise the benefits for you and your creditors.

Creditors may seek changes to the proposal, but they cannot impose them. However, by rejecting the proposed changes, the creditors may vote against the arrangement. If the IVA is rejected, the creditor could force bankruptcy.

Advantages:
– You only pay what you can afford and interest is frozen
– Creditors are no longer able to take legal action against the debts included in the IVA
– Certain assets can be excluded from the IVA
– Your reputation is protected as the process is not publicised
– Any remaining debt is written off

Disadvantages:
– Your credit rating will be negatively affected for 6 years, but it is possible to rebuild it
– Any financial windfalls received will be contributed into the IVA for the benefit of creditors
– A supervisor will conduct an annual review of your finances, if you are able to pay more, your payments will be increased
– The IVA cannot be cancelled without notifying the IP, if the IVA is terminated, it is likely that you will go bankrupt
– The living allowance will allow for modest living