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Individual Voluntary Arrangement

Sub pages : Should I Continue Trading? | Bankruptcy | Individual Voluntary Arrangement | Options For Limited Companies |

Individual voluntary arrangements (208KB)

It may be possible to avoid bankruptcy if you can raise a sum of money that your creditors will agree to accept in full and final satisfaction of their debts.

You will need to contact an insolvency practitioner to supervise the arrangement.

The money you can raise will have to be enough to pay their fees, as well as pay the creditors. However, if you can show that the creditors will get at least as much as they would if you were bankrupt, an individual voluntary arrangement (IVA) stands a good chance of success.

The insolvency practitioner will prepare a proposal to the creditors.This can be very flexible and may be for payments out of income for up to five years, as well as or instead of a lump sum payment.

The proposal will usually contain a clause that, if you do not keep to the arrangement, the supervisor (who is the insolvency practitioner) has a duty to apply for bankruptcy and has the right to reserve part of any money paid for this purpose.

The IVA has the authority of the courts and creditors cannot pursue you when this is in place.

You should not enter into an IVA if there is a possibility you may not be able to keep to the agreement. This will almost invariably mean that bankruptcy proceedings will be commenced by the supervisor.

If you need more information about individual voluntary arrangements, please phone us.

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