The Individual Voluntary Arrangement (or IVA)
Why you need advice about when to use an IVA.
If you are thinking
about entering into an individual voluntary arrangement, then read this first.
The individual voluntary arrangement was hailed as
revolutionary when it was introduced by the 1986 act. Since that time, many IVAs
have been entered into and many of them have been successful.
However, since the Enterprise Act 2002, the
value of the IVA has diminished considerably.
This is because bankruptcy
is now, in essence, a one-year affair, possibly as little as three months.
Moreover, creditors have adopted a really hard line towards this procedure,
notably HM Revenue and Customs and, more recently, the banks and financial
Did you know that
the number of IVAs which now fail is enormous? This is essentially because
the burden of payments is so great. Additionally, creditors want properties
revalued, usually after four years, so they can take the extra equity. And a
failed IVA means that the debtor has paid a lot of money initially in fees and
actually got nowhere.
We are not saying
the IVA is a bad procedure; what we are saying is that its merits are
relatively limited now and that it is generally not in the interests of debtors
to enter into one. The procedure is expensive and many companies are making big
money out of it to the detriment of the debtor and his creditors. You will see
many companies offering you free advice about IVAs. Beware - they are trying to
sell it you, so their advice is most unlikely to be impartial and unbiased.
Before you allow yourself to be talked into this, take
down-to-earth independent advice
from someone objective. It may still be right for you, but then again, it may
not and you need to know. Only a detailed consideration of your own specific
circumstances will reveal whether it is of value to pursue.
It is now several years since Adrian Leopard & Company
recommended to a debtor that an IVA was the best route forward. Check out your
own position and if it is right for you, we can also recommend a suitable local
insolvency practitioner who can handle it for you.