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Individual Voluntary Arrangement – Is It Suitable For You?

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Individual Voluntary Arrangement (IVA) is a debt repayment solution that can save your home and other valuable assets from being repossessed by your creditors. An IVA will help you restructure your debts in a way that makes it possible for you to pay it off. A debtor who is going through financial difficulties can opt for this method to avoid a bankruptcy order. For this, the debtor is required to seek the advice from an insolvency lawyer who can provide IVA Help & Advice. An attorney can assist the debtor by drawing up a proposal that can be submitted for approval of the creditors.

We have included the expert advice of some of the brightest legal minds at attorneys.com to make this article more insightful. Let us try to delve a little deeper into this topic. We will be taking a closer look at IVA here to provide you with a clearer picture of this debt solution that can make a lot of difference to your life and reputation.

The first step to take after finding a suitable insolvency practitioner would be to make a detailed statement of affairs to submit before the court. This will help you to get an interim order to stop anyone from moving a bankruptcy petition and will give you a breather while your creditors consider your proposal. The insolvency practitioner will study your proposal in detail and make a recommendation to the court if there is any realistic arrangement in the proposal. Subsequently, a meeting of the creditors would be convened and the proposal would be placed before them.

If a meeting is arranged and 75% (of the debt value) of the creditors attending the meeting approve the proposal, then all the other unsecured creditors – who were notified about the session – are also bound by the terms of the IVA. It is, therefore, essential that a creditor with more than 25% of the debt value must not reject this proposal for IVA to be granted.

The creditors or the insolvency practitioners can petition for bankruptcy if they feel that the debtor had persuaded them to accept the proposal by giving false or misleading information. They can also move the petition if the debtor fails to stick to the terms of the IVA.

If you are a homeowner entering into an IVA, you must keep in mind that any available equity would be expected to be released for the benefit of your creditors. When an IVA is started, an assessment of your income and expenditure would be taken which would be reviewed annually. If the creditors consider certain items to be excessive, then you might be required to furnish evidence to prove otherwise. If you fail to do so, then you may be asked to cut down on your spending. There are general restrictions on the spending of a person who has entered into an IVA.

Individual Voluntary Arrangement is one of the options available to manage your debt after running into a financial crisis. Study the options before you and choose the one that is best suited for your case.