Individual Voluntary Arrangement (IVA)

An IVA is a binding contract between you and your creditors to pay back some or all of your liabilities over a specified period of time.

The process itself requires you (the debtor) to draft an IVA proposal to be presented to creditors for their consideration.  This is a very detailed document that will set out what contributions you will make into the IVA, cash flow forecasts to support the feasibility of the ongoing contributions, and ultimately a time line as to what creditors can expect to receive and when.  We would act in an advisory capacity to assist you in drafting the proposal.

Once the proposal document has been drafted, we would then be instructed as Nominee.  A Nominee’s duty is to review the IVA proposal, put forward by you, and give an opinion as to its likelihood of success based on the information provided.  This is then filed in Court before circulating to creditors for their consideration.

At least 75% of the creditors voting in respect of the proposal must vote in favour in order for it to be approved.  The terms of the Individual Voluntary Arrangement are binding on all unsecured creditors regardless of whether they voted in favour or not.

Once the IVA is approved, we act as Supervisor throughout the duration of the IVA to ensure that you are adhering to the terms set out within the proposal.

Key advantages of a IVA

• If you are a sole trader, you regain control of your business throughout the process.
• The IVA is not publicly advertised, it is a private arrangement between you and your creditors.
• All creditors are bound by the IVA, thus alleviating immediate creditor pressure.
• There is scope to vary the terms of the IVA process at a later date to account for changes within your personal circumstances.
• Liabilities can be paid over a long period of time, typically between 3-5 years.
• Full debt forgiveness upon the successful implementation of the IVA.

Our team have helped many individuals benefit from an IVA procedure, giving them the breathing space required.  Please contact us at an early stage to explore the possibility of an IVA process.

FAQ’s relating to the Individual Voluntary Arrangement process

How quickly can I enter into IVA?

The timing of seeking approval of an IVA is wholly dependent upon the provision of quality information in order for us to assist in the preparation of the proposal and seeking creditor approval.  Typically, we would aim for an IVA proposal to be approved within 3-4 weeks following our instruction.

Do creditors have to be paid in full?

Not necessarily.  You can propose whatever you feel is appropriate to creditors.  However, in our experience, it is always more difficult to obtain approval to an IVA where anything less than a 100p in the £ return is being offered.  This is particularly the case when there is a liability due to H M Revenue & Customs or consumer creditors, where standard IVA terms are expected.

What happens if the terms of the IVA are breached?

If the terms of the IVA are breached, for example you fail to pay the agreed contributions or fail to file tax returns on time; the proposal will set out what action the Supervisor is to take in the event of an unremedied breach.  If no variation is achievable, steps are taken to petition for your bankruptcy (in which case you will be declared bankrupt).

How much does an IVA cost?

The cost of an IVA depends upon your personal circumstances.  At Keystone Recovery we specialise in bespoke IVA packages. If your liabilities solely consist of consumer debts and you simply propose to make a set voluntary contribution per month, in all likelihood we will guide you towards a different firm who can provide you with a more standardised package at a fixed cost.

If you would like to explore an IVA that has more bespoke issues, such as partnership debts, lump sum contributions from the sale of property, etc. please contact us for a quote.