Individual Voluntary Arrangement (IVA)


An IVA can release you from your unsecured debts and is an alternative to a Debt Management Plan.

IVA vs Debt Management Plan

Debt Management Plans are informal arrangements with creditors to make minimum repayments, for an indefinite period, until circumstances change for better or worse. It is not usually a permanent solution to an individual’s debt problems.

If you are unable to pay your debts in full, then, instead of a Debt Management Plan or bankruptcy, you can propose an IVA to your unsecured creditors.

What is an IVA ?

An IVA is an agreement to pay a sum of money into a single arrangement for the benefit of unsecured creditors, i.e. those who do not hold security, such as a mortgage, over any assets. Often, this can result in a significant proportion of your unsecured debts being written off by the creditors. Once an IVA has been approved, no unsecured creditor can take any further action to recover their money, outside of what has been agreed in the IVA.

A typical IVA could include an offer to pay a:

  • Lump sum of money, possibly obtained from a re-mortgage or third party;
  • Monthly payment from disposable income, for between 3 and 5 years; or
  • Combination of the above.

The Process

Proposals are put to creditors usually at a virtual meeting using a decision procedure such as a conference call or video conference and if 75% in value of those who vote agree to the IVA, then all creditors, even those voting against the proposal are bound by it. An Insolvency Practitioner (IP), who holds a license from a regulatory body, must agree that the IVA is fair to both the individual proposing the IVA and to their creditors. The IP will become the supervisor of the IVA on its approval and will be responsible for ensuring that it is implemented as agreed.

Who would benefit from an IVA ?

People who may find the IVA route a preferable alternative to bankruptcy include:

  • Traders operating in their own names or in partnership, who wish to continue in business, where Bankruptcy would otherwise prevent them;
  • Company directors who would be barred from holding office in bankruptcy;
  • Professionals, whose employment would be jeopardized by Bankruptcy, through regulatory requirements, codes of conduct and general reputational implications;
  • Individuals with assets to protect, such as their home;
  • Anybody with substantial debts who is able to make a lump sum payment, or monthly contributions for 3 to 5 years and wishes to avoid Bankruptcy.

Even if a bankruptcy order has already been made against an individual it is possible to propose an IVA to creditors. If accepted, the bankruptcy order can be annulled, restoring the situation for the debtor. In some cases, it may be possible to seek an annulment without an IVA, but appropriate advice should be taken.

For a detailed analysis of your financial affairs and to discuss you options in detail, please call John Paylor 020 3096 0750.

GBR Meeting to discuss how we can help you


Guardian Business Recovery
72 Temple Chambers
Temple Avenue
London, EC4Y 0HP
Tel : +44 (0)20 3096 0750
Fax : +44 (0)20 7583 1200

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John Paylor is licensed as an insolvency practitioner in the UK by the Institute of Chartered Accountants in England and Wales

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