Individual Voluntary Arrangement

Individual Voluntary Arrangement

What is an Individual Voluntary Arrangement?

The Individual Voluntary Arrangement (IVA) procedure was introduced by the Government in 1986 as an alternative to bankruptcy; it allows people take control of their debts and negotiate a deal with their creditors leading eventually to a safe and secure financial future free of debt.

An IVA freezes interest on unsecured debts and allows an individual to agree with their creditors that they will repay either all of their debts or a percentage of them over a number of years.

What is the process?

The debtor must make a full disclosure to the Nominee of all their assets and liabilities. The insolvency legislation requires a debtor to prepare the proposal to their creditors with the help of a licensed insolvency practitioner (IP), who is called their Nominee.

The proposal put to the creditors must show that they will make a better recovery by agreeing to the IVA than if the individual is made bankrupt instead. The proposal is confidential and the debtor remains in control of their assets, but the conduct of the IVA is overseen by an IP, who is known during the process as the Supervisor. This is usually the same IP who acted as the Nominee.

An individual can put proposals for an IVA to their creditors if they have already been declared bankrupt or if they have been presented with a Bankruptcy Petition by a creditor. If the debtor is self-employed and has a viable business, they can continue to trade.

What are the payment terms for an IVA?

There are no set rules for an IVA, so there is no minimum or maximum payment percentage and no limit to the duration. Whilst certain creditors such as HMRC have accepted norms that they will tolerate, this process is a matter of negotiation and depends entirely on an individual’s personal circumstances.

Opus is committed to giving the best advice to financially stressed individuals and guiding them in formulating a proposal, which meets the required threshold of being fair, fit and reasonable and, crucially is achievable. Getting this difficult balance right is vital for all concerned.

Opus has a number of IPs, who specialise in personal insolvency, so that we are able to carry out the role of Nominee and once appointed as the Supervisor of the Arrangement.

Advice on Individual Voluntary Arrangements (IVAs)

For more information on Individual Voluntary Arrangements, we offer an initial free consultation to review the situation and make recommendations on the best way forward. If we think that an Individual Voluntary Arrangement is the best route forward, our specialists can support the individual at every step of the way through the process.

Contact our Head Office on +44 (0) 20 3326 6454 to arrange a no obligation and confidential call with one of our Partners.