Six Steps to IVA Approval

Admin IQY — Sat, 12 Nov 2011 11:15:21 +0000

Individual voluntary arrangements or IVAs are seen by many as an attractive alternative to bankruptcy proceedings and the IVA is experiencing a massive increase in popularity. This is predominantly because it is less costly than bankruptcy, while creditors receive more than they would through bankruptcy; what’s more debtors avoid the stigma attached to bankruptcy.

Before an individual voluntary arrangement can be put into effect, several steps need to be completed, in order to make the procedure legally binding to all creditors. The six steps to obtaining an IVA are as follows:

1. The debtor appoints an insolvency practitioner to propose their IVA and implement the arrangement.

2. An IVA proposal is created, detailing funds and assets available to the creditors, in order to encourage them to accept the bid.

3. The insolvency practitioner applies for an interim order which prevents any impending legal action from creditors while the IVA is being negotiated.

4. A meeting of creditors is called at which to decide whether to accept or reject the proposal. If agreed the proposal is legally binding to all parties.

5. If the IVA process is approved the insolvency practitioner takes control of the assets and administers the arrangement in accordance with the proposal.

6. If the arrangement is not agreed upon the IVA can be revised and proposed to the creditors once again.

It is important to note that no proposal may, without their consent, reduce the rights of preferential creditors. The same applies to the rights of secured creditors.

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admin — Sat, 28 Nov 2009 19:07:03 +0000

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Six Steps to IVA Approval

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