We advise on Individual Voluntary Arrangements (IVA) which can avoid bankruptcy. An IVA can also be entered into post-bankruptcy to annul bankruptcy order. In order to succeed, 75% of your creditors in value must agree to the IVA proposal.
An IVA usually lasts for 5 years and sets out the payments to be made to all the creditors. The same percentage must be offered to all the “unsecured creditors”, namely those creditors who do not have a secured charge on your property.
An IVA does not affect the rights of creditors with security, “secured creditors” who may still wish to sell your property to be paid their debt. A person looking to enter into an IVA is required to make full disclosure of their finances. The IVA Supervisor will petition for bankruptcy in the event the payment promises in the IVA are not met.
There has been an increase in the number of bankruptcy petitions presented by Supervisors of IVAs in recent years. We often advise our clients not to enter into an IVA but to simply enter into an informal settlement agreement with their creditors which can be more beneficial as;
- Your creditors are not required to be paid the same percentage
- Costly Supervisors’ fees can be avoided
- Your name does not appear on the IVA Register which is a further disadvantage as this will affect your ability to borrow in the future.
An informal arrangement is sometimes known as a “Debt Management Plan” (DMP).
We advise on the suitability of IVAs and are able to bring claims against IVA companies and Supervisors for having mis-sold IVA where more suitable options were available.
Reclaiming Payment Protection Insurance (“PPI”) Pay Outs
We help on reclaiming amounts against IVA supervisors as many PPI settlements fall outside the IVA.
There are two main types of IVA agreement: an “all asset agreement” and a “defined asset agreement”.
An all asset agreement is where all of your assets are included within your IVA. Therefore any PPI claim will automatically belong to your creditors.
However, the second type of IVA is a defined asset IVA which normally allows you to keep any PPI payouts.
We bring claims against Supervisors of IVAs for them to pay back your PPI settlement if they have been wrongly withheld.
Please contact us if you require free initial advice on IVAs or IVA mis selling.