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Individual voluntary arrangement (IVA)
Practical Law UK Glossary 3-107-6714 (Approx. 4 pages)
Glossary
Individual voluntary arrangement (IVA)
A statutory arrangement with creditors, with an essentially contractual nature, which allows a debtor to:
- Settle their outstanding unsecured debts by agreeing a composition in satisfaction.
- Agree a scheme of arrangement for payment of their debts.
(Section 253(1), Insolvency Act 1986.)
A debtor's IVA is supervised by an insolvency practitioner, or other qualified person, who acts as nominee for the debtor's IVA proposals and supervisor on approval by creditors. The IVA supervisor's powers are provided under the terms of the debtor's IVA and subject to the control of the court.
IVAs can be used as an alternative to bankruptcy, either as a way of avoiding a bankruptcy order or as grounds for annulling it. Defaulting on an IVA is also grounds for presenting a bankruptcy petition (section 264(1)(c), IA 1986).
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