An Individual Voluntary Arrangement or IVA is a contract between the individual (referred to as the debtor) and his/her creditors to repay a given sum over a period of time. It is the least complicated method of insolvency and can bring a sense of order to an individual’s life particularly if they have been stressed or anxious over their financial circumstances.

If the debtor is in a trading situation, it is usual that he/she may want to continue with the business but is experiencing difficult times. The business may be successful given normal trading conditions and an IVA gives the debtor time in which to consolidate the position and to spread payments to creditors over a given period of time. By so doing, the business might continue to make profits afterwards or at the end of the term of the arrangement, the debtor may decide to cease trading.

Once the arrangement has been entered into it is binding on all creditors who were given notice of the meeting. The decision to implement the arrangement is voted for at a creditors meeting whereupon creditors voting in person or by proxy must exceed 75% in value in order for the IVA to be implemented.

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