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Individual Voluntary Arrangement

IVA is a legal practice which is a part of the insolvency act. The conditions of IVA are flexible in which a creditor is given assurance of returning of the money same wise as in bankruptcy. It is legal contract between the debtor and his creditors of the money repayments on easy monthly payment basis made formally in presence of licensed party and by documentation of the court.
Procedure for the IVA
·         A proposal for the agreement is made by the debtor under the supervision of Insolvency Practitioner to make sure that the conditions of the Insolvency Act 1986 are met and to keep an eye on the financial condition of the debtor while making the proposal.
·         After checking the work ability of the proposal nominee asks the court to call for a meeting of the debtor and the creditors and to prohibit any bankruptcy issues and petitions until the successful completion of the agreement. 
·         The nominee then present the proposal to the debtors and the creditors either they agree to the conditions or there are some changes to made and held the vote for the acceptance and rejection of the proposal.
·          If 75% of the creditors or their representatives in the meeting are in favor of the proposal then it is considered as agreement and a legal enforcement to fulfill all the bindings of the contract untill its completion.
·         It is then the supervisor’s duty to give away monthly disbursements which are decided in the meeting to all the creditors and to set the debtor’s assets and liabilities.
Pros and cons of IVA
There are also barriers and benefits attach with IVA. Before making any binding with the IVA agreement familiarize yourself with the issues attach with it.
·         It is beneficial for the debtor because it is on his behalf to decide that how to pay to the creditor’s monthly payment and how to deal with the assets. He has upper hand in making such decisions while other parties decision are also considered. Then if he is fulfilling the terms of the agreement and making regular monthly payments then there will be no risk for bankruptcy.
·         Debtor can ask the creditors for the returning of certain assets after some mutual agreements and conditions.
·         Because don’t have to pay to government for avoiding bankruptcy so can pay more to the creditors.
·         There is no fear of bankruptcy proceedings and other legal processes until the completion of the agreement.
·         The rate of interest is fix and you are assured to get out of debt in 60 months.
·         There is less mental stress and make hassle free payment as have only to one party instead of paying too much creditors and managing their accounts.
·         The risk that is attached with an IVA is that if you have chosen a wrong IP or an IVA company or has made wrong communication then you may lead to bankruptcy.
·         So make healthy factual and non-ambiguous talks, discussions and relationship with IP to avoid such risks.
·         Word of mouth also reduces such type of risks. So before choosing IP prefer those parties or IVA companies that you come to know from your circle. This will also avoid the risk of failure of IVA. Otherwise be careful while making decision.
·         The biggest risk attach is that if you are unable to make payment then it results in bankruptcy and failure of agreement. Also it increases the rate of interest of the creditors and have to pay from the date of creditors meeting making you more obliged.

  • While choosing IVA company make through discussion on your financial matters with them because the selection of right IVA Company is very important. They should listen you keenly and make hassle free discussion then they would be able to proper guide you. A good IVA company also tells you about other opportunities and alternatives depending upon your monetary situation.