Individual Voluntary Arrangement

An Individual Voluntary Arrangement (“IVA”) is a process whereby an Insolvency Practitioner is firstly appointed by an individual as a ‘Nominee’ to assist in providing a proposal to your creditors to compromise their claims whereby bankruptcy can be avoided in a controlled manner with a better financial outcome for all parties.

Your Nominee will assist you in the preparation of a proposal, estimated outcome statement, relevant filing requirements (if necessary) and the convening of a decision procedure by which your proposal is to be considered by your creditors.  Following approval of a proposal, an Insolvency Practitioner is appointed as a ‘Supervisor’ of that Arrangement in order to ensure that you meet the relevant terms of the same.

An IVA can be utilised by individuals who have considerable personal debts, liabilities relating to personal guarantees or to businesses, including unincorporated partnerships, which are not incorporated as a limited company.  You provide funds into the arrangement for a number of years out of your income and/or from the sale of any surplus assets and sometimes a third party, such as a relative, may be willing and able to contribute a lump sum into the arrangement to increase the potential return to creditors.

An IVA is a very flexible procedure, which enables individuals to propose a full and final settlement with their creditors.  An IVA is used to provide a better return to creditors than if an individual was adjudged bankrupt.

This is only a very brief introduction to the procedure and great care is required to ensure that an IVA is appropriate for you.  The team at Live Recoveries has the relevant experience in order to guide individuals as to the process of an IVA and to consider whether an IVA is an appropriate solution; there are potential pitfalls as well as potential benefits and these will need careful explanation.

Face to face interviews are essential in order that a full understanding of your position can be obtained. Our team understand that this can be a stressful time for you and can provide the relevant support and information in order to put you at ease.


Bankruptcy might be a viable option to help you back on the path to a debt-free future.  Although the term ‘bankruptcy’ carries an element of stigma, for many people it is the best way forward for their given circumstances and may be more appropriate than an IVA or debt management plan.

Bankruptcy a court-based procedure and you can either choose to become bankrupt or it can be enforced against you if you cannot pay your debts.   However, new procedures allow for a Debtor to apply for their own bankruptcy online, subject to costs of £680.

You can opt for a ‘debtor’s petition’ if you feel that there is no prospect of repaying your debts.  Alternatively, a ‘creditor’s petition’ can be forced on you by someone who is owed more than £5,000.

Your assets will be placed in the hands of an officially appointed Trustee (who has extensive powers of investigation) whose duty is to safeguard and realise your assets in order to repay your creditors.

You have to follow bankruptcy restrictions when you’re bankrupt. This means you cannot:

  • borrow more than £500 without telling the lender you’re bankrupt;
  • act as a director of a company without the court’s permission;
  • create, manage or promote a company without the court’s permission;
  • manage a business with a different name without telling people you do business with that you’re bankrupt; or
  • work as an insolvency practitioner (an authorised debt specialist)

It’s a criminal offence to break the restrictions – you might be prosecuted if you do.

Restrictions last until your bankruptcy ends.  This will happen sooner if you annul your bankruptcy.

After 12 months you’re usually released (‘discharged’) from your bankruptcy restrictions and debts.  Assets that were part of your estate during the bankruptcy period can still be used to pay your debts, and a Trustee can suspend your discharge due to your non-cooperation.

As a bankrupt individual, you have a duty to assist the Trustee in enquiries relating to your financial conduct before the bankruptcy.  A Trustee has three years from the date of the Bankruptcy Order to realise any interest in the property in which you reside.  If you have surplus income each month, you could be liable to make payments for a period of three years via an Income Payments Agreement or via an Income Payments Order.

If you are bankrupt and the official receiver thinks you have been dishonest or are to blame for your debts, the court can make a bankruptcy restrictions order (BRO) against you.

Your bankruptcy already places restrictions on what you can do for a set period.  A BRO extends this period of restrictions for between 2 and 15 years and subjects you to further restrictions.

It must be stressed that this is a brief overview of Individual Voluntary Arrangements and Bankruptcies and is not intended to allow a debtor to self-diagnose.  It is recommended that if you are under pressure from creditors or you are considering entering bankruptcy, you contact us for a free consultation to ensure that you take the appropriate action.

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