Individual Voluntary Arrangements (IVAs)

If you are struggling with high levels of debt, an individual voluntary arrangement (IVA) could offer a solution that helps you repay what you owe in a way that is manageable. However, IVAs can be complex, and should not be entered into lightly without seeking proper professional advice from specialist solicitors. 

Clough & Willis are experts in all aspects of IVA regulations and can offer guidance and support throughout the entire process. We can walk you through the IVA pros and cons, and help you create an arrangement that meets the needs of your creditors, while ensuring you remain in control of your own assets and finances.

With offices based in Bolton and Bury, our lawyers have years of experience in helping individuals and businesses effectively manage their debts, and can provide you with the pragmatic advice you will need to gain maximum benefit from your IVA plans, while avoiding the potential risks. 

To discuss your IVA options in a free, no-obligation chat, call us on 0800 083 0815, or fill out an online enquiry form and we will get back to you at a more convenient time.

How we can help

At Clough & Willis, our expert IVA solicitors can advise you on everything you will need to consider when setting up an IVA, tailoring our guidance to the specifics of your situation. 

Our aim is to make sure your arrangement provides you with maximum control over your repayments, while ensuring that all of your debts can be settled in a reasonable timeframe. 

If you are facing severe financial difficulties and believe an IVA might be a viable option for you, it is important to get in touch with us as soon as possible. Seeking legal advice in a timely manner will make it easier to find a workable IVA solution and avoid potential bankruptcy.

What is an Individual Voluntary Arrangement?

An Individual Voluntary Arrangement is an arrangement that can be agreed upon with your creditors, laying out the steps that will be taken to pay off part or all of your outstanding debts. 

IVAs are agreed with a professional insolvency practitioner, who will assess the details of your financial situation - including your assets, debts, income and creditors - and work out a plan of repayment that you can afford over a set period of time. 

The practitioner will act as a supervisor for the IVA, and will outline the conditions of the arrangement at a creditors’ meeting. 

The IVA will come into effect when 75% by value of the creditors who vote agree to it. Sometimes, creditors will push to modify the arrangement before it can go ahead, but once it has been approved, it will apply to all creditors, including those who voted against it. 

Once the IVA is active, you will provide regular payments to the insolvency practitioner, who will be responsible for dividing this money between your creditors. The insolvency practitioner will charge fees for setting up and administering the IVA which will be agreed with the creditors.

What are the advantages of an Individual Voluntary Arrangement?

IVAs are widely used as an alternative to more informal debt repayment arrangements or bankruptcy petitions, providing the subject with a greater amount of protection and control over the process. 

An approved IVA will stop your creditors from taking legal action against you for your debts, freezing any additional interest or charges, and binding them to the terms of repayment laid out by your IVA. 

These arrangements can also be tailored to suit your circumstances and ability to pay, with payments often made gradually over a period of five years. 

For many, the most prominent reason for using an IVA is to avoid bankruptcy, which would give them much less control over which of their assets might need to be sold to repay their debts, potentially putting them at risk of losing their home. Additionally, an IVA will allow you to continue serving as a director of a limited company or run a normal bank account, neither of which is an option after being declared bankrupt.

What are the disadvantages of an Individual Voluntary Arrangement?

IVAs are not going to be suitable for all circumstances, and negative outcomes are possible if the arrangement is not handled properly. 

For example, creditors will often insist the IVA contains a provision that the debtor can be declared bankrupt if they fail to keep up with their monthly payments. 

This can occur if the repayment schedule was overly optimistic, or if the debtor encounters unforeseen difficulties; in these cases, the debtor may need to persuade the creditors to change the terms of the IVA. 

Additionally, IVAs can often last a lot longer than other forms of debt repayment, including bankruptcy - in some circumstances, this protracted repayment period may end up being unsuitable for their situation. 

As such, it is vital to speak to a solicitor about all of the pros and cons of an IVA before entering into one.