Individual Voluntary Arrangement
At BRI Business Recovery and Insolvency, we work with both companies and individuals helping them navigate what can be a daunting and uncertain path through insolvency. One of the areas we can help with is Individual Voluntary Arrangements.
What is an Individual Voluntary Arrangement?
An individual voluntary arrangement (‘IVA’) is a legally binding agreement between an individual and their creditors to repay them in full or in part and over a period of time, usually up to 5 years.
An individual voluntary arrangement often includes a realisation of assets and/or regular monthly contributions of surplus income and/or a third party contribution that would otherwise be unavailable in the alternative (bankruptcy).
If you need support when it comes to IVA, contact our team today.
What Happens During an IVA?
During an Individual Voluntary Arrangement, unsecured creditors vote on whether or not to accept the proposals for repayment and at least 75% of unsecured creditors, based on value of debt, need to vote in favour in order for it to be approved. Once approved it is legally binding on all unsecured creditors and they cannot take further recovery action in relation to their debt.
Where HM Revenue and Customs are a creditor, they have a specialist team that review proposals to ascertain whether they believe that the proposal is the best offer that can be made by the individual and that it has a realistic chance of success. This determines how HMRC will vote in the arrangement and is often crucial to the proposal’s acceptance. We work closely with our clients to ensure that we put the best proposal for an Individual Voluntary Arrangement to HMRC that we can.
What are the Benefits of an Individual Voluntary Arrangement?
An individual voluntary arrangement is often preferred as it allows the person to avoid bankruptcy and retain control over their assets and business (sole traders or partnerships), subject to the terms of the proposals.
Contact us if you would like further information and assistance regarding individual voluntary arrangements. There is no charge for doing so and it is without obligation.