An Individual Voluntary Arrangement (IVA) is a legally binding agreement between you and your unsecured creditors. It allows you to reorganise your financial affairs to the satisfaction of all parties involved. An IVA is a fairly common alternative to Bankruptcy for people looking to end escalating debts and begin steps towards a debt-free life. It is most commonly used for individuals trading a business and can be a successful tool to protect the business entity and facilitate on going trading, which may have been hampered by cash flow problems or unforeseen trading difficulties.
An IVA freezes interest accruing on debts and allows you to put a proposal to creditors so you can repay your debt (or a percentage of) over a given period of time. The terms of an IVA are very flexible and it’s very much down to your individual circumstances. Proposals to creditors are likely to be based around either assets realisation or contributions from income, especially in a trading business.
Under the law, you are required to prepare your proposal to creditors with the assistance of a Licenced Insolvency Practitioner, known as the ‘Nominee’. A creditors meeting would then be convened and it would a requirement that 75% majority in value of the creditors voting on your proposal agreed to either the original terms or negotiated modifications. The arrangement would then be binding on both creditors who had failed to vote and also an minority who had voted against the proposal. At this point the Nominee would become the Supervisor and be responsible for over seeing the compliance with the agreed terms of the arrangement.
At DFW Associates, we are fully qualified Insolvency Practitioners who specialise in personal insolvency, and we can assist you with the whole process while ensuring that your IVA maximises the return to your creditors within reasonable and realistic terms.