What is an IVA?

An IVA is a formal agreement made between a debtor and his creditors about how the debts will be paid (either in full or part). You need to apply to court and an insolvency practitioner has to be appointed to ‘supervise’ the arrangement.

How do I get an IVA?

You need to find an insolvency practitioner who is willing to act as the nominee of the arrangement and then either:

• apply to court for an interim order, which stops your creditors taking action against you before your proposal is accepted by your creditors, or  
• go ahead with your proposal without applying for an interim order.  

In either case the insolvency practitioner tells the court about your proposal and a meeting of creditors is held, to see if they wish to accept your proposal. If they do, the insolvency practitioner tells the court, and he supervises the arrangement to make sure the creditors are paid in accordance with the agreement.

Click HERE for a Brief Overview of the IVA Process

FAST TRACK INDIVIDUAL VOLUNTARY ARRANGEMENTS (FTVAs)

FTVAs are voluntary arrangements where the OR acts as nominee and supervisor post bankruptcy. There is a provision in the legislation for it to be changed to allow the OR to act in pre-bankruptcy cases, but at the moment, the OR is supervising post-bankruptcy cases only. FTVAs are similar to IVAs but no meeting of creditors is required and no modifications to the proposal by creditors are allowed. 

FTVA Process

They are identified through the interview stage. The bankrupt completes a proposal and returns it to the OR with the registration fee of £10. The OR has 28 days to decide whether to act as nominee. The proposal is sent to the creditors for voting.  More than 75% in value of those voting is required before it is accepted.  

Once accepted the case is passed to an RTLU who will file a report of approval at court. The OR (of the RTLU) then becomes supervisor. The RTLU arranges an annulment of the Bankruptcy Order and administers the FTVA. 

The RTLU collects the payments from the bankrupt, via Finance section. If the debtor defaults on payment Finance section advises the RTLU and the RTLU will contact the debtor to find out the reasons for the default. 

FTVAs are suitable for simple asset cases (non traders). 

The nominee fee is £310, the registration fee is  £10 and the supervisor’s fee is 15% of all asset realisations.