The following Restructuring & Insolvency guidance note Produced in partnership with Philip Hinks of 3 Verulam Buildings and Paul Allen of FRP Advisory LLP provides comprehensive and up to date legal information covering:
An individual voluntary arrangement (IVA) is an agreement entered into between an individual and their creditors (and possibly with third parties) for a composition of that person’s debts or a scheme of arrangement (scheme) of their affairs. The relevant provisions are found in Part XIII of the Insolvency Act 1986 (IA 1986). The type and content of the composition or scheme is open-ended and is a matter for the debtor and their creditors with the assistance of an insolvency practitioner (IP) (described as the nominee before the IVA is approved, and the supervisor thereafter).
An IVA is effectively a contract, the terms of which are to be found in the IVA proposal. A private contractual arrangement would however require the assent of all of an individual’s creditors in order to become a globally binding agreement. This would obviously not be feasible in the large majority of cases. An IVA, by contrast, is binding on those creditors who voted against the proposal (or who did not vote at all), provided the requisite majority of votes approving the IVA proposal were obtained, and subject always to possible challenges—see Practice Note: Challenging an individual voluntary arrangement (IVA)
Although judicially recognised as a species of (statutory) contract, an IVA proposal does not amount to an offer for the purposes
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