An Individual Voluntary Arrangement (IVA for short) is an agreement between you and your creditors which states new terms on which the money owed should be repaid. It gives creditors a chance to recover at least some of their money in a situation where there is a high possibility that they would otherwise get nothing. By adhering to the terms of an IVA, you can write off as much as 75% of your total debt. Taking the IVA option, instead of filing for bankruptcy, also means that your professional status will be unaffected and no details will be made public. Contacting a specialist IVA practitioner is the first step that you need to take if you want to proceed with an IVA. If necessary, the IVA practitioner will apply to the court for an ‘interim order’, which prevents your creditors from proceeding with a bankruptcy petition against you while the interim order is in place. It also prevents them from taking other legal action against you during the same period.

Your IVA representative will ask the court to call a creditors meeting so that the proposed IVA can be discussed. If the court thinks that your proposal is viable, then details of the meeting are sent to each of your creditors. It is important to be totally open and honest about who you owe money to, and how much you owe them, as only those creditors who were told about the meeting will be bound by the terms of the IVA. At the meeting, your creditors vote on whether to accept your IVA proposal. If enough creditors (over 75% in value of the creditors present in person or by proxy) vote in favor, the proposal is accepted. It then becomes binding on all creditors who had notice of the meeting, even if they did not attend. You will then work with your IVA practitioner to see out the terms of the agreement. At the end of the agreed period, if you have fully adhered to the terms of the IVA, you will be debt free. Your creditors can no longer pursue you under any circumstances.

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