Individuals – Individual Voluntary Arrangement (IVA)
What is an IVA?
The IVA (Individual Voluntary Arrangement) procedure was introduced by the Government in 1986 as an alternative to bankruptcy; it allows people take control of their debts and negotiate a deal with their creditors leading eventually to a safe and secure financial future free of debt.
An Individual Voluntary Arrangement is a legally binding agreement between an individual and their creditors. It allows an individual to reorganise their financial affairs and takes away the devastating stress caused by being under sustained financial pressure from the people to whom they owe money.
An IVA freezes interest accruing on debts and allows an individual to agree with their creditors that they will repay either all of their debts or a percentage of them over a number of years.
What are the payment terms for an IVA?
There are no set rules for an IVA, so there is no minimum or maximum payment percentage and no limit to the duration. Whilst certain creditors such as HMRC have accepted norms that they will tolerate, this process is a matter of negotiation and depends entirely on an individual’s personal circumstances. Opus Restructuring & Insolvency is committed to giving the best advice to financially stressed individuals and guiding them in formulating a proposal, which will maximise the recovery for your creditors but which is reasonable for the debtor and, crucially is achievable. Getting this difficult balance right is vital.
The insolvency legislation requires a debtor to prepare the proposal to their creditors with the help of a licensed insolvency practitioner (IP), who is called their Nominee. Opus Restructuring & Insolvency has a number of IPs, who specialise in personal insolvency, so that we are able to carry out the role of Nominee.
What is the process?
The debtor must make a full disclosure to the Nominee of all their assets and liabilities. The proposal put to the creditors must show that they will make a better recovery by agreeing to the IVA than if the individual is made bankrupt instead. The proposal is confidential and the debtor remains in control of their assets, but the conduct of the IVA is overseen by an IP, who is known during the process as the Supervisor. This is usually the same IP who acted as the Nominee.
An individual can put proposals for an IVA to their creditors if they have already been declared bankrupt or if they have been presented with a Bankruptcy Petition by a creditor. If the debtor is self-employed and has a viable business, they can continue to trade.
Opus will undertake a free review of an individual’s financial affairs. If we believe that an IVA is the best option, we will notify creditors on their behalf prior to entering into the IVA and conduct the negotiations with the creditors to agree the terms of the IVA. Our specialists have been advising financially stressed people for over 20 years and have steered many of them through to a successful resolution of their difficulties through an IVA.
Free Guide – What is an IVA?
Download our guide about Individual Voluntary Arrangements.