An individual can propose an Individual Voluntary Arrangement (IVA), which is a scheme to creditors for repayment of all or part of their debts over a period of time. An IVA is used as a means of avoiding bankruptcy.
Creditors have an opportunity to review an individual’s proposals and vote either against or for the proposals (with or without modification). A majority of over 75% in value of those creditors voting must support the individual voluntary arrangement for it to be binding on all creditors.
Why seek an individual voluntary arrangement?
The advantages of an IVA are:
- Creditors will receive a more favourable return than in a bankruptcy scenario
- Individuals will avoid the stigma, restrictions and consequences of bankruptcy as well as maintaining control of their estate
- Interest on debts will cease to be applied on approval of an individual voluntary arrangement
- In certain circumstances, creditors will write off a significant proportion of their debt
- Once complete, an individual voluntary arrangement will leave the individual debt free
Bailey Ahmad Business Recovery can; assist in producing a viable proposal to put before creditors; facilitate negotiations and, if accepted, act as supervisor of the individual voluntary arrangement to ensure that it is carried out as envisaged.
How do I know I am insolvent?
Before we can consider the various solutions available for an individual, it is important to first understand what the term insolvent means.
An individual is insolvent when they have insufficient assets to cover their liabilities/debts or are unable to pay debts when they fall due.
Conversely, when there are sufficient assets to cover liabilities or to pay debts as and when they fall due,