Fighting Debt - a user guide

9) INDIVIDUAL VOLUNTARY ARRANGEMENT (IVA)

What is an 'Individual Voluntary Arrangement' (IVA)?

IVA is an alternative to bankruptcy and is an arrangement through the county court to pay an agreed amount off debts over a shorter period. This can mean paying a high monthly instalment over 3 to 5 years with rest of the debts written off and/or using a lump sum to pay off a debt in one go. IVA is worth considering if you can pay a large amount each month and/or you have a lump sum or assets that can be included. There are no limits to how much debt you have to be to request an IVA.

What is the procedure for an IVA?

An IVA must be set up by an Insolvency Practitioner (IP) who is authorised to set up IVAs. They will apply to the county court for an 'Interim Order' which stops your creditors from starting bankruptcy proceedings against you or any other enforcement action without the court's permission whilst the interim order is in force.

The IP sends the IVA proposal to your creditors and arranges a formal meeting called a 'creditors meeting', giving the creditors at least 14 days notice.

IMPORTANT

Make sure all Creditors are notified as if not they do not have to follow any terms set by the IVA.

At this meeting, creditors will vote on whether to accept the IVA. If 75% of your creditors 'listed by value of individual debt' agree to the IVA then the rest are bound by the IVA even if voted against or did not vote at all. Once the IVA is agreed the IP will supervise arrangements and make sure you make payments.

How do I find an Insolvency Practitioner?

Your local county court may be able to give you a list of insolvency practitioners. Ask your local official receiver's office for a list. You can also contact 'The Insolvency Service central enquiry line' on 0845 602 9848. There is an Insolvency Service publication called 'The Directory of Authorised Insolvency Practitioners' and can be found in local reference libraries. It lists IPs by area and who regulates them.