Individual voluntary arrangement (IVA)
An individual can propose an Individual Voluntary Arrangement (IVA), which is a scheme to creditors for repayment of all or part of their debts over a period of time as a means of avoiding bankruptcy.
Creditors have an opportunity to review an individual’s proposals and vote either against or for the proposals (with or without modification) at a meeting of the individual’s creditors. A majority of over 75% in value of those creditors voting at the meeting must support the IVA for it to be binding on all creditors.
The advantages of an IVA are:
- Creditors will receive a more favorable return than in a bankruptcy scenario
- Individuals will avoid the stigma, restrictions and consequences of bankruptcy as well as maintaining control of their estate
- Interest on debts will cease to be applied on approval of an IVA
- In certain circumstances, creditors will write off a significant proportion of their debt
- Once complete it will leave the individual debt free
We can advise individuals whether an IVA should be considered in the circumstances; assist in producing a viable proposal to put before creditors; facilitate negotiations and, if accepted, act as supervisor of the IVA to ensure that it is carried out as envisaged.
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