Individual Voluntary Arrangement (IVA)

Individual Voluntary Arrangement (IVA)

What is an Individual Voluntary Arrangement?

An Individual Voluntary Arrangement is a formal and legally binding agreement between an individual and their creditors.

It allows someone who cannot repay their debts under the existing contractual terms to put forward an alternative proposal based on what they can realistically afford.

That proposal may involve monthly payments, a lump sum, money provided by a family member, the sale or refinancing of an asset, future business income or a combination of different sources.

An IVA is therefore not a standard product.

It should be designed around the circumstances of the individual, the nature of their debts, the assets available, the reliability of their income and their wider financial objectives.

Some IVAs are completed through a lump sum within a relatively short period. Others involve regular contributions over several years. A proposal may last around six months where the necessary funding is available immediately, while another may continue for three, four or five years. Some arrangements last longer where creditors request changes, payments are missed or property provisions require an extension.

The correct structure depends on what the individual can genuinely offer and what creditors are likely to accept.

An IVA must be proposed and supervised by a licensed insolvency practitioner. However, before a formal proposal is prepared, it is important to establish whether an IVA is actually the right solution.

At Navigate Business Recovery, our focus is on helping the individual answer that question first.

We review the whole financial position, compare the available alternatives and consider whether a credible and sustainable IVA proposal can be developed. Where an IVA appears appropriate, we help the individual understand what should be offered, how the proposal might be structured and what risks need to be addressed before it is submitted to creditors.

An IVA is not simply a five year payment plan

Many people first hear about IVAs through advertising that describes them as a way to make one affordable monthly payment and write off the remaining debt.

That description is incomplete.

An IVA is a negotiated insolvency proposal. It does not have to follow one fixed structure, and it should not automatically be based on five years of monthly contributions.

A person with access to a lump sum may be able to propose a short arrangement funded by a relative, an asset sale, refinancing, a redundancy payment or another legitimate source.

Someone with reliable disposable income may be better suited to a monthly contribution arrangement.

A sole trader may propose contributions based on expected business income.

A company director may need to deal with personal guarantees that are likely to become payable following the failure of a company.

A homeowner may propose regular payments together with a later review of property equity.

The strongest proposal is not necessarily the one offering the highest monthly payment or the longest term.

It is the proposal that provides a fair return to creditors while remaining realistic for the individual.

An IVA that appears attractive at the beginning but cannot be maintained is unlikely to provide a successful outcome. A lower sustainable contribution may be more valuable than an ambitious proposal that fails after a year.

How do you know whether an IVA is right for you?

An IVA may be suitable where an individual cannot repay their debts in full but can make a meaningful offer to creditors.

That offer may come from income, assets, third party assistance or a combination of available resources.

However, the existence of unsecured debt does not automatically mean that an IVA is appropriate.

The first question should not be whether someone qualifies for an IVA.

The first question should be whether an IVA produces a better and more sustainable outcome than the alternatives.

The financial difficulty may be temporary and capable of being resolved through direct negotiation with creditors.

A Debt Management Plan may offer greater flexibility.

A Debt Relief Order may be more appropriate where the relevant eligibility requirements are met.

Bankruptcy may provide a quicker and more certain release from debt, particularly where there are no significant assets to protect.

An asset sale, refinancing arrangement or negotiated settlement may resolve the position without the need for a formal insolvency procedure.

The individual’s income must also be considered carefully. A monthly contribution IVA will only succeed where the payment remains affordable after reasonable living expenses have been met.

The effect on property, business interests, personal guarantees and future plans must also be understood before any recommendation is made.

At Navigate Business Recovery, we help the individual examine the complete picture rather than beginning with the assumption that an IVA must be the answer.

How Navigate Business Recovery assesses your position

The starting point is a detailed review of the financial position.

This includes identifying all debts, assets, income, household expenditure, business interests and potential future liabilities.

We look beyond the accounts that are already in arrears or being actively pursued.

A company director may have signed personal guarantees that have not yet been called upon. A sole trader may have future tax liabilities that are not yet due. A landlord may face mortgage shortfalls or tenancy related claims. A jointly owned property may contain equity that needs to be considered. A director loan account may create an additional personal liability if a company enters insolvency.

If these matters are overlooked, the proposed IVA may be based on an incomplete financial picture.

We therefore consider personal loans, credit cards, overdrafts, tax liabilities, business debts, guarantees, joint borrowing, property ownership, vehicles, savings, pensions and other relevant assets.

We also consider expected claims arising from company failure, ongoing self employed income, potential lump sum funding and the future needs of the household.

The purpose is not merely to calculate a monthly payment.

It is to understand what outcome the individual is trying to achieve and whether an IVA can realistically deliver it.

Someone may want to protect a home, preserve a viable business, avoid bankruptcy restrictions or resolve personal guarantee liabilities. These objectives must be balanced against affordability, creditor expectations and the risk of the arrangement failing.

Working out the best proposal

If an IVA appears appropriate, the next stage is deciding what proposal should be put forward.

There may be several possible strategies.

An individual with a family member willing to provide financial assistance may be able to offer a lump sum IVA. This could allow the arrangement to be completed much sooner than a long monthly contribution proposal.

Someone with limited immediate funds but stable employment may be better suited to regular contributions.

A person expecting the sale of an asset may propose monthly payments for a short period followed by a lump sum.

A sole trader may need a proposal based on conservative business forecasts rather than fixed employment income.

A homeowner may need to consider whether refinancing is realistic and what should happen if funds cannot be raised.

Navigate Business Recovery helps the individual compare these different structures before the formal proposal is prepared.

We consider what creditors are likely to receive, what they might receive in bankruptcy, whether a lump sum would improve the outcome and whether monthly contributions would remain sustainable.

We also examine how long the proposal should reasonably last, whether third party funding is secure, how property should be treated and whether personal guarantee claims need to be estimated and included.

The proposal should also contain enough flexibility to deal with ordinary changes in circumstances.

A strong IVA proposal should be fair to creditors, but it must also be achievable for the individual.

Why the comparison with bankruptcy matters

Creditors considering an IVA will normally compare the proposed return with what they might receive if the individual became bankrupt.

This comparison is one of the most important parts of the proposal.

If creditors would receive significantly more through bankruptcy, they may be less willing to support the IVA unless there are other commercial reasons for doing so.

However, calculating the likely bankruptcy outcome is not always straightforward.

Property equity, business assets, income contributions, selling costs, trustee expenses and disputed asset values may all affect the amount available to creditors.

A jointly owned property may contain less realisable value than the headline equity figure suggests. A business asset may be worth less in a forced sale than it is to the individual who uses it. An income contribution may depend on the person’s actual disposable income rather than gross earnings.

Navigate Business Recovery can help the individual understand this comparison before the proposal is submitted.

This allows weaknesses to be identified early and helps determine whether an IVA offers creditors a realistic alternative to bankruptcy.

It also helps prevent someone from entering an IVA where bankruptcy would produce a quicker, less expensive or more certain outcome.

Who can enter into an IVA?

IVAs may be used by employees, homeowners, landlords, company directors, sole traders and self employed individuals.

There is no single debt level or income figure that automatically makes someone suitable.

The individual will normally be insolvent, meaning that they cannot pay their debts as they fall due or that their liabilities exceed the value of their assets.

More importantly, there must be a proposal that creditors have a reasonable commercial reason to accept.

Someone with stable disposable income may offer regular monthly contributions.

A person without sufficient income may still be able to propose a lump sum arrangement.

A business owner may offer funds generated through future trading.

A landlord may propose payments based on rental income or an asset disposal.

The proposal should reflect the real circumstances rather than forcing every case into the same format.

How does an IVA work?

Once the financial position has been reviewed and the proposed strategy has been developed, a licensed insolvency practitioner prepares the formal IVA proposal.

Before approval, the insolvency practitioner acts as nominee.

The nominee considers whether the proposal has a reasonable prospect of being approved and implemented.

The proposal explains the individual’s financial circumstances, the reasons for the insolvency, the assets available, the proposed payments and the estimated return to creditors.

It is then sent to creditors, who are invited to vote.

Creditors may accept the proposal as submitted, reject it or request modifications.

A modification may change the monthly contribution, the duration of the arrangement, the treatment of additional income, property obligations or reporting requirements.

The individual should understand every modification before agreeing to it.

Once the proposal has been approved, the insolvency practitioner normally becomes the supervisor.

The supervisor collects payments, monitors compliance, reviews the individual’s circumstances and distributes available funds to creditors.

Approval is therefore the beginning of the arrangement rather than the end of the process.

Preparing a proposal that creditors can support

Submitting an IVA proposal does not guarantee that creditors will approve it.

The proposal should explain clearly why the IVA offers a better or more reliable outcome than the alternatives.

Creditors are likely to consider the amount being offered, the expected return in bankruptcy, the accuracy of the income and expenditure assessment and the value of any property or other assets.

They may also consider why the debts arose, whether all liabilities have been disclosed, whether future income is reliable and whether third party funding is genuinely available.

The proposal must be realistic and supported by evidence.

A lump sum offered by a family member should be confirmed and available.

Business forecasts should be conservative and credible.

Property valuations should be sensible.

Household expenditure should reflect genuine needs rather than figures designed simply to make the proposal appear affordable.

Navigate Business Recovery can help identify areas that may concern creditors before the formal proposal is issued.

This does not mean that approval can be guaranteed.

It means that the proposal can be developed with a proper understanding of the issues creditors are likely to examine.

Lump sum IVAs

A lump sum IVA may be suitable where a fixed amount of money is available but the individual cannot support long term monthly contributions.

The funds may come from a family member, refinancing, the sale of an asset, a redundancy payment or another legitimate source.

Where the funding is immediately available, the arrangement may be capable of completing within approximately six months. The actual timetable will depend on creditor approval, receipt of the funds and completion of the supervisor’s administration.

A third party offering money will normally need to confirm that the funds are available and explain whether any conditions are attached.

The proposal should not rely on money that may never be received.

It should also explain why creditors should accept the sum offered rather than continue enforcement or pursue bankruptcy.

A short lump sum IVA can provide certainty and allow the individual to move forward more quickly.

However, it is only appropriate where the funding is credible and the amount provides a reasonable outcome for creditors.

Monthly contribution IVAs

A monthly contribution IVA is based on disposable income.

Household income is compared with reasonable living expenses, and the remaining affordable amount is offered to creditors.

These arrangements often last for several years.

A proposal may be structured over three, four or five years depending on the circumstances and creditor expectations. It may continue for longer where payments are missed, creditors request an extension or property provisions require additional contributions.

The monthly payment must be sustainable.

A household budget that leaves no allowance for vehicle repairs, clothing, medical needs, school costs, rising utility bills or ordinary emergencies is unlikely to remain realistic for several years.

The calculation should not be based on the maximum payment someone can make during a particularly good month.

It should be based on the amount they can reasonably maintain through ordinary changes in household circumstances.

Navigate Business Recovery can help review the proposed budget and identify whether the contribution appears realistic before the individual commits to the arrangement.

Combination proposals

Some IVAs use more than one source of funding.

The proposal may include monthly contributions followed by a lump sum.

It may combine a family contribution with proceeds from an asset sale.

A sole trader may offer an initial payment together with contributions from future business income.

A homeowner may make regular payments while agreeing to review property equity later.

Combination proposals can provide flexibility, but each part must be realistic.

Where the arrangement depends on a future event, the proposal should explain what happens if that event does not occur.

A proposal based on uncertain refinancing, an unrealistic property value or overly optimistic business profits may create a serious risk of failure.

The individual should understand which obligations are fixed, which depend on future circumstances and what alternatives will apply if the expected funding is not available.

Sole traders and IVAs

An IVA can be particularly useful where a viable sole trader business has accumulated debts but remains capable of generating future income.

A sole trader and the business are legally the same person. Business debts are therefore personal debts.

Tax arrears, supplier liabilities, commercial rent, finance agreements and other trading debts may all form part of the individual’s position.

The proposal must allow the business to meet its ongoing costs.

Future tax, wages, supplier payments, insurance, rent and other expenses should not be ignored simply to produce a higher IVA contribution.

A reliable cash flow forecast is essential.

The forecast should allow for seasonal changes, unexpected costs, household drawings and future tax liabilities.

Navigate Business Recovery can help assess whether the business is genuinely viable and whether the proposed contributions leave enough working capital for it to continue.

Where the business cannot support itself, an IVA may only delay a more serious problem.

Company directors and personal guarantees

A company director may enter an IVA without automatically placing the company into insolvency.

The company and the director are separate legal persons.

However, company and personal finances often become connected through personal guarantees, director loan accounts or personal borrowing introduced into the business.

If the company is likely to fail, guarantee claims may arise after the IVA proposal has been prepared.

These potential liabilities should be considered from the beginning.

A guarantee should not be ignored simply because the lender has not yet demanded payment.

Navigate Business Recovery can help identify signed guarantees, estimate likely claims and consider how the company’s position may affect the individual’s proposal.

An IVA may provide a useful way to deal with personal guarantee liabilities following company failure.

However, this will only work where those liabilities are properly understood, disclosed and reflected in the proposal.

Which debts can be included?

Many unsecured debts can normally be included in an IVA.

These may include personal loans, credit cards, overdrafts, tax liabilities, trade debts, unpaid utility accounts, council tax arrears and liabilities arising under personal guarantees.

Sole trader debts may also be included.

Every known creditor should be disclosed.

It can be dangerous to omit a creditor because the debt is disputed, has not yet been demanded or is owed to a family member.

Potential liabilities should also be discussed where there is a genuine possibility that they will arise.

A complete creditor list is essential when calculating voting rights, estimating the return to creditors and deciding whether the proposal is viable.

Debts incurred after the IVA has been approved are not automatically included.

Ongoing rent, mortgage payments, utilities, taxes and other commitments must continue to be paid as they fall due.

An IVA deals with existing financial difficulties. It does not protect the individual from new liabilities created afterwards.

What happens to your home?

An IVA does not automatically require a homeowner to sell their property.

This is one of the reasons some people consider an IVA as an alternative to bankruptcy.

However, the home may still play an important part in the proposal.

The individual’s share of the equity may be reviewed, and the arrangement may require an attempt to raise funds later.

Where refinancing is unavailable, the IVA may be extended or another agreed treatment may apply.

Before proposing an IVA, the likely property value, outstanding mortgages, secured borrowing and ownership position should be examined carefully.

Joint ownership does not necessarily mean that all equity belongs to the person entering the IVA.

Selling costs and the interests of other owners may also affect the amount available.

The proposal should explain how the property will be valued, when the review will take place, what amount may need to be raised and what happens if refinancing is refused.

These questions should be answered before the IVA begins, not several years later when the equity review becomes due.

Navigate Business Recovery can help the individual understand these provisions and consider whether the proposed treatment of the home is realistic and acceptable.

How are payments calculated?

A contribution based IVA should be built around genuine disposable income.

The individual’s household income is reviewed against reasonable domestic expenditure.

Housing, food, utilities, transport, clothing, childcare, insurance, medical costs and other essential commitments should be allowed for properly.

The purpose is not to remove every element of personal choice or force the household to live at an unrealistic level.

Creditors will expect unnecessary expenditure to be reduced, but the budget must remain sustainable.

A proposal based on an artificially high contribution may be approved initially but become impossible to maintain.

Navigate Business Recovery can help the individual prepare a realistic budget and challenge assumptions that may create an unnecessary risk of failure.

The correct contribution is not the highest amount that can be squeezed from the household.

It is the amount that can be maintained while ordinary living costs continue to be met.

Does a partner’s income have to be included?

A partner does not become liable for an IVA simply because they live with the individual.

Their personal income and assets do not automatically become part of the arrangement.

However, the household budget may need to consider how shared expenses are divided.

It may not be reasonable for the person entering the IVA to claim the full cost of housing, utilities and food where another adult contributes towards those expenses.

Equally, the partner should not be expected to pay the individual’s creditors.

The assessment should identify a fair contribution towards shared household costs without transferring liability from one person to another.

Joint debts require separate consideration.

An IVA may prevent recovery against the individual who enters the arrangement, but it does not normally release the other joint borrower.

The creditor may pursue that person for the unpaid balance.

The advantages of an IVA

An IVA can provide important benefits where it is suitable.

Once approved, included creditors are normally prevented from taking separate recovery action for debts covered by the arrangement.

This can reduce the pressure caused by repeated demands, court proceedings and enforcement.

The individual makes payments in accordance with one agreed proposal rather than trying to meet the original demands of multiple creditors.

An IVA can allow a sole trader to continue operating.

It does not automatically prevent someone from acting as a company director.

It may provide a way for a homeowner to address debt without the immediate property risks associated with bankruptcy.

A lump sum IVA may also provide a relatively quick conclusion where suitable funding is available.

After successful completion, the remaining balances of debts dealt with by the IVA are normally released in accordance with its terms.

These benefits can make an IVA a valuable solution, but only where the arrangement has been structured properly and is capable of being completed.

The disadvantages of an IVA

An IVA is a formal insolvency procedure and should not be treated as an easy debt cancellation scheme.

It affects the individual’s credit record and is entered on the relevant public insolvency register.

A contribution arrangement may continue for several years.

Income and expenditure will normally be reviewed during that period.

Additional income, bonuses, inheritances, windfalls and property equity may have to be paid into the arrangement depending on its terms.

Fees are deducted from the money available.

The individual must comply with the proposal and any modifications required by creditors.

If the arrangement fails, creditors may resume recovery action and bankruptcy may remain possible.

Money already paid into the IVA will not normally be returned.

Some of it may have been used for fees and expenses, with the remainder distributed to creditors.

The individual could therefore spend several years in an arrangement and still be left with significant debt if the IVA fails.

This is why suitability and affordability must be tested carefully before the proposal is submitted.

IVA fees

The insolvency practitioner is entitled to be paid for preparing and supervising the IVA.

Fees are normally divided between the work completed before approval and the ongoing administration after approval.

There may also be expenses connected with insurance, registration, legal work, property valuations or other necessary matters.

The proposal should explain how the fees are calculated and how they will be paid.

They are usually deducted from funds contributed to the arrangement rather than charged separately in advance.

The individual should understand the likely total cost, whether the fees change if the arrangement continues for longer and what proportion of the contributions is expected to reach creditors.

They should also be told whether any introducer or referral business has received a payment for passing the case to the insolvency practitioner.

Fees do not automatically make an IVA unsuitable, but they form part of the overall comparison with other debt solutions.

What happens after approval?

Once the IVA has been approved, the individual must comply with the agreed terms.

Payments must be made when due, and the supervisor may request payslips, bank statements, tax returns, accounts and updated expenditure information.

Changes in employment, income, address or financial circumstances should be reported promptly.

The individual may also need permission before obtaining significant new credit.

The precise obligations depend on the proposal and any modifications agreed with creditors.

A complete copy of the approved documents should be retained.

The individual should not rely solely on verbal explanations of what is required.

Understanding the written terms is essential because those terms determine how additional income, payment difficulties, property equity and changes in circumstances will be handled.

Annual reviews and additional income

Many contribution based IVAs include regular reviews.

The supervisor compares current income and expenditure with the previous assessment to decide whether the contribution remains appropriate.

A pay increase does not necessarily mean that every additional pound must be paid into the IVA.

The treatment will depend on the terms of the arrangement and whether reasonable household costs have also increased.

Overtime, bonuses, commission and other variable income may be dealt with under separate provisions.

The individual may be permitted to retain part of the additional earnings while paying a proportion into the arrangement.

Anyone with variable income should understand the calculation before agreeing to the IVA.

A reduction in income should also be reported quickly.

Waiting until several payments have been missed may reduce the options available.

What happens if circumstances change?

A well prepared IVA should contain a realistic way of dealing with ordinary changes in circumstances.

Temporary financial difficulties may sometimes be managed through a payment break, reduced contribution or extension where the terms allow.

More significant changes may require a formal variation approved by creditors.

Redundancy, illness, relationship breakdown, business decline or increased caring responsibilities can all affect affordability.

The individual should contact the supervisor before payments are missed wherever possible.

Navigate Business Recovery can also help someone understand their position where an existing IVA is no longer affordable.

This may involve reviewing the original terms, considering a payment variation, proposing a lump sum settlement or comparing the consequences of failure with bankruptcy or another alternative.

The correct response will depend on whether the problem is temporary or permanent.

Windfalls and inheritances

An IVA will normally contain provisions dealing with windfalls and unexpected receipts.

These may include inheritances, lottery winnings, compensation payments or other substantial funds.

The treatment depends on the wording of the proposal, the amount received and when the entitlement arises.

A significant windfall may allow the IVA to be completed earlier, although the individual may still be required to pay the full amount owed together with applicable fees and other sums before being released.

Any windfall should be reported to the supervisor before it is spent or transferred.

Failing to disclose it may place the entire arrangement at risk.

What is a variation?

A variation changes the terms of an approved IVA.

The supervisor normally prepares a report explaining the proposed change and asks creditors to consider it.

A variation may reduce contributions, extend the arrangement, accept a lump sum or alter the treatment of an asset.

Creditors are not required to accept every request.

They will consider why the original arrangement can no longer continue, whether the individual has complied so far and whether the proposed change produces a better outcome than failure.

A variation should therefore be based on accurate evidence and a realistic assessment of future circumstances.

What happens if an IVA fails?

An IVA may fail where payments are not maintained, required documents are not provided, assets or income are concealed or another important obligation is breached.

The supervisor should explain the breach and whether there is an opportunity to remedy it.

If the problem cannot be resolved, the arrangement may be terminated.

The protection from included creditors then ends.

Creditors may resume enforcement and pursue the remaining balances.

Depending on the terms, interest and charges may also become relevant again.

Some arrangements allow or require the supervisor to petition for bankruptcy, although this does not happen automatically in every case.

The financial consequences of failure can be serious.

This is why the proposal should be designed around what the individual can realistically complete, rather than what appears most attractive at the approval stage.

Completing an IVA

An IVA is completed when the individual has fulfilled the obligations required by the arrangement.

The supervisor carries out final checks, deals with creditor claims and issues formal completion documentation.

The remaining balances of debts dealt with by the IVA are then normally released in accordance with its terms.

Completion may not happen immediately after the final payment.

The supervisor may still need information or time to conclude the administration.

The completion documents should be retained permanently because creditors and credit reference agencies may require them when records are updated.

Warning signs of an unsuitable IVA

An IVA should be approached cautiously where the proposed payment is based on unrealistic household expenditure or the adviser focuses only on reducing the monthly payment.

Concern should also arise where bankruptcy, a Debt Relief Order or other alternatives are not properly explained.

Property provisions should never be left vague.

Personal guarantees, future tax liabilities and potential business claims should not be ignored.

A proposal should not exclude known creditors or rely on income that is uncertain.

No responsible adviser should guarantee creditor approval before the vote has taken place.

Pressure to proceed immediately is also a warning sign.

The individual should have enough time to understand the proposal, ask questions and compare the IVA with every realistic alternative.

How Navigate Business Recovery can help

Navigate Business Recovery helps individuals decide whether an IVA is the right strategy before they enter into a long term formal commitment.

We begin by reviewing the whole financial position.

This includes debts, income, household expenditure, property, business interests, personal guarantees, joint liabilities and potential future claims.

We then compare the realistic alternatives.

Where bankruptcy, direct negotiation, a Debt Management Plan, a Debt Relief Order, an asset sale or another solution would provide a better outcome, that should be understood before an IVA is proposed.

Where an IVA appears suitable, we help the individual consider the strongest structure to put forward.

This may involve assessing whether a lump sum or contribution proposal is preferable, working out a sustainable monthly payment, reviewing what creditors may receive in bankruptcy and deciding how long the proposal should reasonably last.

We also consider whether third party funding is available, how property should be addressed and whether personal guarantee or business liabilities need to be included.

For a sole trader, we can review business forecasts and future tax commitments.

For a company director, we can examine likely guarantee claims, director loan accounts and the effect of company failure.

For a homeowner, we can help explain the likely treatment of equity and the consequences if refinancing is unavailable.

Our role is to help the individual understand what is being offered, why it is being offered and whether the proposal supports their long term recovery.

The insolvency practitioner has formal responsibilities as nominee and supervisor.

Navigate Business Recovery remains focused on the individual’s position, objectives and understanding.

An IVA should not be selected because it offers the most attractive headline payment.

It should be selected because it provides the strongest realistic route out of debt.

Summary

An Individual Voluntary Arrangement is a flexible formal agreement rather than a standard five year repayment product.

It may be funded through monthly contributions, a lump sum, asset proceeds, third party assistance or a combination of resources.

A short lump sum IVA may complete within approximately six months, while a contribution based arrangement may continue for three, four or five years. Some arrangements may last longer depending on their terms and the circumstances that arise.

The most appropriate structure depends on the individual’s income, assets, debts, business position and long term objectives.

Before an IVA is proposed, every realistic alternative should be considered.

Where an IVA is suitable, the proposal should provide creditors with a credible outcome while remaining achievable for the individual.

Navigate Business Recovery helps individuals understand whether an IVA is appropriate and, where it is, helps them consider the strongest proposal to put forward.

What should you do next?

Prepare a complete record of your debts, income, household expenditure, property, business interests and personal guarantees.

Include liabilities that may arise in the future, particularly where a company is experiencing financial difficulty or a guarantee has not yet been called upon.

Consider whether a lump sum may be available from an asset, refinancing or third party assistance.

Do not assume that an IVA must involve five years of monthly payments.

Equally, do not accept a short proposal without understanding whether the funding is secure and whether creditors have a reason to support it.

Before entering an IVA, compare the proposed outcome with bankruptcy and every other realistic solution.

The right question is not simply whether you can enter an IVA.

It is whether the proposed IVA gives you the best achievable route to financial recovery.