In times of financial difficulties

Corporate Recovery and Insolvency terminology

Individual Voluntary Arrangements (“IVA”)

An IVA is essentially a contract between an individual and his or her creditors to repay a proportion of their debts over a period of time. It is often an attractive alternative to bankruptcy. The individual may raise funds by disposing of some assets, arrange for a third party to provide funds and/or make voluntary contributions for the benefit of the creditors from his income. An Insolvency Practitioner acts as the supervisor of the IVA.

The advantage to the insolvent individual is that he or she may be able to retain assets, such as the matrimonial home, and will avoid the stigma of bankruptcy. The advantage to the creditors is that they generally receive a higher dividend than they would do in a bankruptcy.

Bankrupts could have their bankruptcy annulled by arranging an IVA with an Insolvency Practitioner or, in limited circumstances, a "Fast Track" IVA with the Official Receiver.