What is an Individual Voluntary Arrangement?
Chamberlain & Co’s experienced staff have seen the development of the IVA from its beginnings in 1986 to the detailed and flexible solution to personal debts that it is today.
An IVA provides a legally binding means for a sole trader, or perhaps the director of a limited company pressed by personal guarantee liabilities, to offer assets and income as a full and final settlement of their debts over an agreed period.
What is an Individual Voluntary Arrangement?
By means of liaison with key creditors and the development of a comprehensive IVA proposal to sell assets and offer future income in a binding settlement of all known debts Chamberlain & Co can assist individuals to reach a legally binding agreement with their creditors which can secure the survival of their business.
The IVA Process
Consultation
Guidance
IVA Proposal
Testimonial
Chamberlain & Co was able to secure the agreement of a large of number of creditors to whom our client had given personal guarantees for the liabilities of a failed limited company to an IVA based on the proceeds of assets and income allowing Ian to continue in his role as the director of a new company and therefore preserve his livelihood.
Contact Us
Contact Chamberlain & Co as their experienced staff can quickly assess your ability to propose an IVA and provide guidance regarding terms which will be acceptable to creditors.
Chamberlain & Co can also assist by liaising with pressing creditors while your proposal for an IVA is being developed.
If you require any further information regarding IVA give us a call on 0113 242 0808 or e-mail advice@chamberlain-co.co.uk. Please note fees apply.
What are the advantages and disadvantages to IVA?
Advantages
- You retain control of your assets and may be able to significantly postpone or avoid the sale or remortgage of your family home.
- It is easier for you to remain in business as you will not be automatically disqualified from acting as a director of a limited company and partnerships will not automatically be dissolved.
- An approved IVA binds every creditor entitled to participate in the decision process.
- If you subsequently find yourself unable to comply with the terms of your IVA, it will be possible to amend the arrangement terms if the appropriate majority of your creditors agree.
- IVA fees are paid out of the available funds within the IVA and are controlled directly by the creditors
Disadvantages
- An IVA can last longer than bankruptcy.
- Creditors may suggest modifications to the proposal.
- If you fail to comply with your obligations under the terms of the proposal, the Supervisor of the IVA may be obliged to petition for a Bankruptcy Order against you or legal action from your creditors.
- You may face difficulties obtaining credit for six years from the date of the approval of the IVA. However, once the IVA has been fully completed this should also be noted on your credit file.
Individual Voluntary Arrangement FAQs
What is an Individual Voluntary Arrangement (IVA)?
Widely used by individuals seeking help to avoid the stigma and legal restrictions associated with bankruptcy, an Individual Voluntary Arrangement (“IVA”) is a formal agreement between a person owing money (“debtor”) and his or her creditors. The debtor, and possibly a third party, undertakes to makes certain payments or realise certain assets, or both, in full and final settlement of their debts via an IVA.
Who is an IVA for?
Individuals with debts which they cannot immediately address, but who have income and/or assets which they can utilise over time to achieve an agreed and legally binding compromise with their creditors and hence avoid bankruptcy.
If an IVA is agreed, will the bankruptcy proceedings come to an end?
Yes, if the appropriate majority of creditors are prepared to accept a proposal for an IVA before a court has made a Bankruptcy Order, an application can be made to the court for the dismissal of the petition for a Bankruptcy Order. If a Bankruptcy Order has already been made and creditors subsequently ( after the date of the Bankruptcy Order ) approve a proposal to deal with an individual’s debts by means of an IVA instead, if no creditor challenges the validity of the IVA within 28 days of its approval,the individual is entitled to apply to the court for annulment of the Bankruptcy Order and the court must annul the Bankruptcy Order
Can an IVA be proposed following an individual’s discharge from bankruptcy?
No, if an individual is discharged from bankruptcy (this normally happens on the first anniversary of the date of the Bankruptcy Order unless the Official Receiver or the trustee of the bankruptcy estate applies for suspension of discharge) the individual’s debts are deemed to be forever bound by the bankruptcy proceedings and can no longer be addressed by means of an IVA.
Are HMRC likely to approve a proposal for an IVA?
HMRC will require any individual wishing to enter an IVA to have submitted all outstanding returns required for income tax and VAT purposes and to demonstrate that he/she is making the best possible offer by offering to sell all major assets and, where this is available, contribute future surplus income for the benefit of creditors.
