IVA: Individual Voluntary Arrangement
What Is an IVA
The IVA (Individual Voluntary Arrangement)
was introduced by The Insolvency Act of 1986 as an
alternative to bankruptcy which benefits both the
debtor and the creditor. An IVA enables people facing
financial difficulties to come to a formal agreement
with their creditors rather than having to face bankruptcy.
The IVA represents an exciting new opportunity
to those facing serious debt to both avoid bankruptcy
and to make a fresh start. In this article, well answer
the most frequently asked questions about the IVA.
What Are the Advantages of an IVA
- With an IVA you only pay back an agreed percentage
of your debts
- While an IVA is in place, it is illegal for
your creditors to harass you
- With an IVA, interest on your loan is frozen
which means that your debt won't keep growing
- An IVA doesn't affect your professional status
or ability to hold public office like bankruptcy
does
What Are the Disadvantages of an
IVA
- If you dont stick to the terms of your IVA then
the insolvency practitioner or your creditors
can make you bankrupt.
- If your circumstances alter which means you
can no longer afford the payments, your IVA may
end if the insolvency practitioner is unable to
convince your creditors to accept a new agreement.
How Do I Set Up an IVA
- With the help of an insolvency practitioner,
you outline a debt repayment proposal which clearly
demonstrates how it benefits your creditors and
which shows what funds and assets are available
for them.
- Then you apply to the court for an interim order.
If this order is granted then the creditor cannot
petition for bankruptcy.
- The creditors then meet to decide whether or
not to accept your proposals.
- If the creditors approve your proposals, they
are binding on everyone who had notice of the
meeting. If this happens, the insolvency practitioner
takes charge of the assets which are administered
for the creditors in line with the proposals.
Recommended IVA Body:
Clear Start is an independent free IVA
helpline offering IVA help and advice to anyone in
the UK.
To contact an IVA adviser click here:
IVA
ADVICE or telephone freephone 0800 138 5445.
Who Might Benefit From an IVA
An IVA can help anyone experiencing
debt problems- particularly those who own property
which they would risk losing if they were to be made
bankrupt.
An IVA might be a good idea for you
if you if:
The Enterprise Act of 2004 introduced
new rules on how to get an IVA after you are made
bankrupt.
This involves applying for whats called
a Fast Track IVA by presenting a proposal to the Official
Receiver.
If The Official Receiver thinks that
your creditors would do better to accept an IVA rather
make you bankrupt, he/she might agree to act as supervisor
of the IVA. If the IVA is agreed by your creditors,
your bankruptcy order will be annulled by the Official
Receiver.
Where Will My IVA Details Be Stored
The record of your IVA is kept on a
public register and anyone can search to see if someone
has an IVA. Records of your IVA are also held credit
reference agency files for up to six years.
Details of your IVA will stay on the
public register until it is completed. You can search
the register by using the contact details below.
The Individual Insolvency Register
The Insolvency Service
5th Floor, West Wing
45-46 Stephenson Street
Birmingham
B2 4UP
Tel: 0121 698 4000
Fax: 0121 698 4406
Mike Curry runs a free IVA and consumer
debt helpline offering impartial advice to those suffering
from serious debt.
