What is an Individual Voluntary Arrangement (IVA) ?

Does the IVA provide me with any protection ?

What is expected to be included in my proposal ?

What are my alternatives to an IVA ?

What are the advantages of an IVA ?

What are the disadvantages of an IVA ?

Who can advise me in proposing an IVA ?

What is an Individual Voluntary Arrangement (IVA) ?

An Individual Voluntary Arrangement (IVA) is an alternative to bankruptcy.

It is a legally binding agreement between you, the debtor, and your creditors. Generally, it provides for a determined sum, usually paid by monthly contributions over an agreed period of time in order to pay your creditors an agreed dividend in full and final settlement at the conclusion of the arrangement.

The entire procedure is dealt with by a Licensed Insolvency Practitioner.

Does the IVA provide me with any protection ?

Before your proposals are put to creditors, you may seek an 'interim order' which has the effect of staying proceedings against you, including any bankruptcy petition. Such stay relieves you of the immediate creditor pressure and enables you, in consultation with an Insolvency Practitioner, to prepare for the meeting of creditors.

Once approved, no creditor bound by the arrangement may continue with any proceedings brought against you.

What is expected to be included in my proposal ?

Every case is different and your proposals will be prepared with the assistance of an Insolvency Practitioner, which will take into account your specific circumstances.

The proposal is the key document in any voluntary arrangement and in it you must set out the precise manner in which you are going to pay or compromise with, your creditors, whether that be monthly contributions, lump sum or a combination of the two.

The proposal must be financially feasible and not put so great a burden on you as to be incapable of fulfilment.

From a creditor's perspective, the proposal put forward should place creditors in either a better or at least no worse position than would result from bankruptcy.

Modifications, as is frequently the case, are used by creditors to improve the terms originally put before them.

The proposal, or any modification, must be passed by a majority in excess of 75% in value of creditors in person or by proxy and voting.

What are my alternatives to an IVA ?

Bankruptcy - the control of all your assets is put in the hands of the Official Receiver/Trustee

Consolidation loans - this may provide an affordable solution. However by taking out such a loan, it may make matters worse overall, not better. The lender may register a charge against your property as security. Rates of interest could be extortionate.

Informal arrangement - not legally binding and any creditor could decide to take the appropriate recovery action at any time

Debt management plan - again, not legally binding on your creditors

Re-mortgage - if there is sufficient equity in your property, it may be more advantageous to re-finance and pay off your debts. Rates of interest would generally be much lower than say, a consolidation loan package. DFW can assist you in obtaining such refinance.

What are the advantages of an IVA ?

Creditors are bound by the arrangement if approved by the requisite majority at the creditors meeting

It may be possible to avoid disposing of your home. Any equitable value in the property, may be released by way of re-mortgage, should creditors insist.

The amount to be contributed into the arrangement account will be affordable and feasible from the outset.

There are fewer restrictions than apply in bankruptcy

Professionals eg solicitors/accountants will be able to continue to practice without losing their practicing certificates

Unlike bankruptcy, an IVA is not reported in local newspapers

The stigma of bankruptcy is avoided

What are the disadvantages of an IVA ?

Should you fail to fulfil your obligations as stated in your proposals and agreed upon by creditors, then there will be provision for either your Supervisor or creditors to apply for your bankruptcy.

You will still have an adverse credit rating despite entering into an IVA.

Realising your equitable interest in your property may prove difficult.

IVAs can be particularly onerous due to the commitment of having to pay a certain amount over a certain period of time.

Who can advise me in proposing an IVA ?

An IVA has to be dealt with by a Licensed Insolvency Practitioner who will take instructions from yourself to assist you in preparing a proposal for a voluntary arrangement.

The Insolvency Practitioner will act as Nominee in guiding you through the preliminary stages and the necessary formalities. Following the creditors meeting and provided the proposal is accepted, his role as Nominee will come to an end and in the majority of cases, he will continue to act in the role of Supervisor of the IVA.

DFW will advise you every step of the way of the process.