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Individual Voluntary Arrangement (IVA)

If refinancing isn’t a viable option or you’re unable to secure the funding needed to avoid bankruptcy, an Individual Voluntary Arrangement (IVA) may offer a practical and less severe solution to help you manage your debts.

What Is an IVA?

An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement between you and your unsecured creditors. It allows you to repay your debts over time in a way that reflects your financial situation.

Arranged and overseen by a licensed Insolvency Practitioner, an IVA is typically structured around:

– Regular, affordable monthly payments over a fixed term (usually 5–6 years), or

– A lump sum payment, or;

– A combination of both (for example, monthly payments followed by a lump sum from the sale of an asset or insurance payout)

 

In many cases, creditors will agree to write off a portion of the debt that cannot be repaid by the end of the arrangement.

Note: Secured debts, such as mortgages, are not included in an IVA, but payments toward those debts are taken into account when calculating how much you can reasonably afford to pay.

Eligible creditors may include:

– Trade suppliers

– HMRC (for income tax, VAT, etc.)

– Landlords (for unpaid rent)

– Personal creditors, such as credit cards, loans, or store cards

Key Benefits of an IVA

– Avoids bankruptcy and can protect your home and other essential assets

– One affordable monthly payment tailored to your financial situation

– Stops legal action by creditors once the IVA is approved

– Freezes interest on debts from the date of the creditors’ meeting

– Debt-free on completion – once all payments are made as agreed, remaining debts are written off

Is an IVA Right for You?

An IVA can offer peace of mind, a clear repayment structure, and protection from further creditor action. However, it’s a serious financial commitment and should be considered carefully with the guidance of a qualified debt adviser.

Advice for Companies and Individuals

  • Creditors Voluntary Liquidation (CVL)

    If your company’s debts have become unmanageable and creditor pressure is mounting, it can feel overwhelming. In such cases, Creditors Voluntary Liquidation (CVL) could offer a structured and professional way to close the business and address its financial issues.

  • Members Voluntary Liquidation (MVL)

    An MVL is, in essence, the liquidation of a company that is solvent.
    A company is solvent by definition if it has assets sufficient enough to settle all liabilities in full plus statutory interest.

  • Administration

    Administration is a rescue process for businesses in financial difficulty which can sometimes result in the company becoming solvent again. Alternatively, a sale of the business could achieve continuity thus preserving employment and goodwill.
    Administrators, who must be Licensed insolvency Practitioners, can be appointed by the company, the Directors, a creditor or by a direct application to the Court. During this process, the company is protected from any creditor taking any legal or enforcement action.

  • Compulsory Liquidation

    Compulsory Liquidation sees company assets being sold involuntarily, the staff being made redundant and ultimately being struck off the register.

    Compulsory Liquidation is generally the least favourable insolvency process and best avoided if possible.

  • Bankruptcy

    If a situation arises where raising finance isn’t possible, your business is no longer viable and you have personally guaranteed money to creditors, one option available is bankruptcy.

  • Documents

    The following guidance sheets provide useful guidance of processes and other useful information. They are free to download.

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Get in Touch

All initial meetings are free and confidential. The first consultation will help us establish the current position and allow us to present a range of options available to you.

Send us an email at restructuring@groupams.co.uk or call us on 0161 413 0999.

Disclaimer

AMS Business Recovery & AMS BR is the trading name of Path Business Recovery Ltd, a company registered in England and Wales. Gareth Howarth & Philip Lawrence are Licensed Insolvency Practitioners authorised to act in the United Kingdom by the Insolvency Practitioners Association.

 

The company’s registered address is 1 Hardman Street, Spinningfields, Manchester, M3 3HF. Registered in England and Wales No.: 10149403. VAT No: 242 7332 23

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