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How an IVA Procedure Works


An Individual Voluntary Agreement (IVA) constitutes a comparatively new procedure offering a more personal alternative to bankruptcy. There are several benefits of an IVA over a traditional insolvency, which is why it has turned into an exceedingly popular option for many households. At the same time, to many in debt, the exact implications of an IVA are still unclear and shrouded in complicated legal terminology. Don’t let the latter scare you off. An IVA procedure is really an extremely structured process designed to make success the likeliest outcome.

Step one: Qualifying for an IVA

Before you even start thinking about an IVA, you need to check whether you qualify for the IVA criteria as stipulated by the Insolvency Act. To be eligible for an IVA; among others, you should owe more than £12,000. You also need to be in a stable employment to provide creditors with some kind of safety that you will actually be able to meet the agreements of the IVA.

Step two: Drafting a formal proposal

The main benefit of an IVA consists in its increased flexibility compared to a traditional bankruptcy procedure: You’ll be able to protect some of your assets including, for example, your house, from being taken from you, set up a personalised payment plan and include assets not normally available in bankruptcy, such as third party funds or income from your continued trading or employment. Once you’ve decided on a realistic goal, you will need to present it to your creditors for their approval. Drafting this formal proposal could theoretically be done by yourself, but with regards to the many technical intricacies involved in the process, it is certainly advisable to call in the help of a professional debt management company with a specialised IVA department.

Step three: Assigning the licensed insolvency practitioner and decision-taking on the IVA

As part of the proposal, you will need to assign a licensed insolvency practitioner. The role of the insolvency practitioner is to act as an expert, mediator and middleman. After all, an IVA can only be successful if you are actually seriously capable of meeting the stipulations included in it and if creditors can therefore expect to be compensated at least with part of the original sum owed to them. To this end, the insolvency practitioner will prepare a report providing an independent judgement on the proposal you have made and to then make these findings available to the creditors. After the creditors have been provided with the necessary information, they will vote on the IVA. For an Individual Voluntary Agreement to be accepted, 75 percent – in value – of the creditors need to agree to it.

Step Four: IVA implementation

Once the IVA has been agreed upon, its terms will be valid for five years. After the IVA period has elapsed, your remaining debt is written off.

While all of these steps are transparent and safely regulated, getting professional debt help from an IVA specialist is highly recommended. The earlier you start talking to a professional debt management company to prevent unwanted surprises, the better. At the Debt Advisory Line, we can offer you this expert help through our years of experience and award-winning insight. Don’t hesitate to ask for IVA Advice from an IVA specialist by completing our IVA Advice Form now!



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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