An Individual Voluntary Arrangement (IVA) can have a number of major advantages for consumer debtors and small businesses with overwhelming debt problems as well as creditors.

Advantages of an IVA to you

• An IVA is a private agreement between you and your creditors. Even though a copy of your IVA will be lodged with the local County Court, The Inland Revenue and The Insolvency Service Register, no formal local newspaper notification will be made as with a personal bankruptcy.



• An IVA is usually far more flexible than bankruptcy. The debtor works with the Supervising Insolvency Practitioner to repay what can be reasonably afforded.



• It is easier to maintain some banking arrangements in an IVA than it would be as an undischarged bankrupt.



• The monthly repayments in an IVA can be reduced by more than two thirds compared to the original credit agreements.



• All interest and charges are stopped so the debt does not continue to increase as the IVA progresses.



• Any legal action including bankruptcy proceedings is stopped once an IVA is approved.



• An IVA allows the debtor to remain in any directorships and continue to trade as a sole trader.



• A self employed debtor in an IVA can still access trade credit – with the Insolvency Practitioners permission - if the use of such credit will stimulate a greater IVA return to the creditors.

Advantages of IVAs to your Creditors

• The net return to creditors in an IVA is usually higher than a bankruptcy because the maximum repayment period in bankruptcy is 36 months as opposed to 60 months in an IVA.



• The costs of bankruptcy are often lower than Insolvency fees in an IVA meaning that the return to unsecured creditors is also improved.



• The actual collection of the debt is undertaken by the supervising Insolvency Practitioner which reduces creditor costs.



• Creditors can claim tax relief on the bad debt against profits.

Related Links

Disadvantages of Individual Voluntary Arrangements
IVA Applications
Online IVA Calculator

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