An Individual Voluntary Arrangement ("IVA")
Widely used by individuals seeking to avoid the stigma of bankruptcy, an Individual Voluntary Arrangement is a formal agreement between a person owing money ("debtor") and his or her creditors, under which the debtor undertakes to makes certain payments or realise certain assets, or both, in full and final settlement of their debts.
Whilst there is no requirement to repay creditors in full over the period of the IVA, creditors will expect to receive at least as much as they would have got had the debtor been made bankrupt.
In addition, because the contract setting out what the debtor intends to do during the IVA ("the proposal") requires the approval of more than 75% by value of their creditors, the greater the return to creditors the greater the likelihood of them accepting the proposal.
In considering an IVA it should be noted that the amount of your debts will be frozen at the date the proposal is agreed and interest will, generally, not continue to accrue.
An IVA requires the involvement of a licensed insolvency practitioner ("IP"), who will help you to put together your proposal and arrange the meeting of creditors to consider it. Chamberlain & Co has IPs with the qualifications necessary to be able to assist you to do arrange an IVA.
Whilst the exact terms of the proposal can vary, in a typical IVA you will be required to make an affordable monthly payment to the IP out of any surplus income, after living expenses, over a period of up to five years. In addition, if you own a property with equity in it, you may be required to make a lump sum payment(s) at the end of the IVA.
After deducting fees, the IP will make periodic payments to the various creditors, the size of which will be dependent on the contributions made by the debtor and the relative size of that creditor's debt.
Provided you carry out what you promised to do in the proposal you will, in a typical IVA, be free of your debts in just over five years.
Call us on 0800 195 4585 to discuss if an Individual Voluntary
Arrangement is appropriate for you