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An individual voluntary arrangement is a legal intervention for individuals who are wise
enough to seek it. It is a very strong tool that offers the enabling power of allowing
debtors to pay off debt in a pro rata basis within 60 months or five years. Below are the
procedures of obtaining IVA and how it works in delivering individuals (debtors) from
the angry clutches of creditors.

IVA is a form of insolvency

An IVA is a kind of hybrid debt solution that sits between debt management and bankruptcy. It allows a portion of the debt to be written off (as would be the case with bankruptcy) and the remaining portion to be repayed (as would be the case with debt management). So, althogh the term IVA Debt Consolidation is often used with reference to an IVA, it is very different from other forms of debt management such as a debt consolidation loan.

IVA Procedures

Since IVA is a legal intervention it must therefore be operated by a licensed legal
professional who know his or her onions. It usually entails some questions and answer
sessions. The professional will ask some questions about the current financial status
of the debtor, base on this information an amount to be released on pro rata basis will
be established and followed by initiating a contract or proposals for debtor’s signature
and onward submission to the IP. The Insolvency practitioner (IP) collects the signed
proposal from the debtor and takes to the creditors. The creditor and debtor will receive
an invite to appear in court. Once the application is delivered in court a restricting order
is automatically unleashed on the creditors preventing any further legal action against the
debtor.

IVA approval rules

For IVA to be approved the creditors will be requested to choose for or against the IVA.
If one vote goes in favour of the IVA, it will be approved and a vote against it will lead
to suspension of the meeting. While in suspension, the creditors who did not vote will
be invited to cast their vote. A negative voting that is more than 25% will amount to
terminating the IVA, but a positive vote that is up to 75% will result in the approval of
the IVA. This sets the IVA in motion. The IP role is henceforth converted to a monitoring
role where he or she makes sure that debtor pays the agreed sum regularly and failure to
do so will render the IVA redundant. Alternatively, if the debtor pays up the agreed sum,
he or she will earn the liberty of overlooking the remaining balance.

Individual voluntary arrangement is established and offered as forms of debt
relieve strategy useful in preventing insolvency and it is offered as a debt advice by professionals.