IVA – The advantages of individual voluntary arrangements

If you are considering entering into an individual voluntary arrangement (IVA), then you should weigh up the pros and cons of the process first, to decide whether or not an individual voluntary arrangement is right for you or your business.

There are a number of advantages to applying for an individual voluntary arrangement.

• It is legally binding.
• It is a private matter, so it will not appear in the press.
• It is cheaper than admin istration or bankruptcy.
• You do not suffer the restrictions imposed by bankruptcy.
• The proposals can be flexible to accommodate personal circumstances.
• It stops creditors taking any further action against you, unless you fails to fulfil the terms of the arrangement.
• It provides you with more time to deal with your debts, preventing creditors from taking enforcement action via the court system.
• There is no maximum or minimum level of debt and no maximum or minimum level of repayments, except what is acceptable to your creditors.
• It gives you more say, compared to bankruptcy, in how your assets are dealt with and how payments are made to creditors.
• There are no restrictions regarding personal credit.
• You may be able to persuade your creditors to allow you to retain certain assets, such as your home.

There are some advantages for your creditors too.

• Creditors often getting more than they would via bankruptcy proceedings.
• The costs of an individual voluntary agreement are considerably lower than in bankruptcy, so there is more money left to return to creditors.
• It is an official insolvency procedure, so creditors can still reclaim tax and VAT relief as a bad debt.

It is really important that you also look into the disadvantages of individual voluntary arrangements before making the decision to apply for one.

More information

• IVA – What is an individual voluntary arrangement?
• IVA – The individual voluntary arrangement process
• IVA – Who needs an individual voluntary arrangement?
• IVA – When to apply for an individual voluntary arrangement
• IVA – How to apply for an individual voluntary arrangement
• IVA – The advantages of individual voluntary arrangements
• IVA – The disadvantages of individual voluntary arrangements
• IVA – Insolvency and individual voluntary arrangements