INDIVIDUAL VOLUNTARY ARRANGEMENT

An Individual Voluntary Arrangement (IVA) is an agreement that you come to with your Creditors as an alternative to you being declared Bankrupt.

This Arrangement usually runs for between 3 to 5 years and will usually involve you paying a proportion of your net income through to the Supervisor of the IVA, who distributes this to your Creditors.  In certain circumstances, an IVA can be accepted where a lump sum of money, either from a third party or realisation of certain assets, is distributed as a full and final settlement that is sufficient to satisfy your Creditors.

An IVA is usually put together by you and a licenced Insolvency Practitioner, taking into consideration the assets that you have, the amount of surplus, distributable income that you have available to come up with a satisfactory dividend that is acceptable to your Creditors.

IVA’s are useful for sole traders and non-limited companies that have got into financial difficulties but have a bright future that is being constrained by mounting debts that they cannot afford to pay.

IVA’s are also a useful financial solution to people who have excessive credit or store card debts that they cannot satisfy but are in a stable employment position and able to make regular monthly payments for the duration of the Arrangement.

No two IVA’s are identical, as generally, each person that enters into one, has a different level of debt, however, partners or spouses can enter into what is called an Interlocking IVA, that will allow the debts of both parties to be treated as one, and a distribution made equally between all Creditors of both of them.

An IVA is a formal legal procedure and therefore, there are consequences if payments are not kept up to date and some of these are detailed below:

• Non-payment of monthly contributions may result in the IVA being terminated.
• If the IVA is terminated for a breech, the Supervisor may be instructed to petition for the Debtor’s Bankruptcy.
• If the IVA fails and no Bankruptcy Petition is issued, the original Creditors that approved the IVA will be at liberty to pursue the Debtor for the outstanding debts, plus interest, going forward.
• If your IVA fails or is not approved, you cannot enter into another IVA for a minimum period of 12 months from the date of non-approval or failure.

The procedure for entering into an IVA is to discuss the matter with an Insolvency Practitioner, who will then put together a Proposal for your Creditors.  As each IVA is different, it is imperative that you discuss the matter fully and explore all options prior to entering into an IVA, to ensure it is the correct route to solve your financial problems.

For further information about IVA’s, please contact Bridgestones on 0800 781 0014, where we will be able to go through the alternatives available to you and provide you with information that will enable you to make the correct decision.