An Individual Voluntary Arrangement ("IVA") is a legally binding agreement between you and your creditors, under which you make a proposal which would give them a better return than if you were to be made bankrupt.

No, it requires a licensed Insolvency Practitioner ("IP") to act on your behalf.

To act as Nominee, to negotiate a deal which is fair to both you, the debtor, and your creditors. To act as Supervisor to ensure that you comply with the terms of the agreed IVA.

The IP will draw up a proposal setting out the offer you wish to make to your creditors. This can take several forms: A contribution from income for a period of time, usually 5 years A lump sum from a third party A lump sum from the sale of an asset A lump sum from re-mortgaging The IP will contrast the return to creditors from the IVA against that available under a bankruptcy and lodge the proposal in Court, before sending it out to all your creditors. Your creditors will be invited to a meeting to consider your proposal and vote on whether to accept or reject your proposal or to accept but with modifications. If you accept the modifications, the vote is counted as an acceptance. It is possible to negotiate to arrive at a mutually acceptable outcome. Once the votes in favour exceed 75% by value of the total votes cast, the IVA is considered to be approved. Any creditor who did not vote, or any who voted against, is bound by the arrangement.

If you are unable to secure a re-mortgage, we have had success in obtaining creditor support for an arrangement based upon the property being sold and the debtor being allowed to retain £10,000 to cover the costs of moving to rented accommodation.

There are two elements to the fees: Nominee fees (up to, and including, the meeting) and Supervisor fees (after the meeting, to closure) Other costs include: Specific Penalty Bond premium (an insurance policy to protect creditors in the event the IP absconds with the cash). The level of this premium is dependent upon the level of contributions, or on the size of the lump sum. Other costs include postage, printing, room hire and valuations.

Some IP's will ask for the Nominee's fee 'up front'. We take it from the contributions you make into the arrangement. If your creditors reject the proposal, you will not have to pay any fee. The Supervisor's fee is normally taken by deduction from the contributions, or lump sum. We only require the payment of the Specific Penalty Bond premium once the proposal is ready to lodge in Court. Please note: It is possible to agree the level of fees with the IP prior to him acting. However, your creditors can insist upon a lower level. It would be most unusual for creditors to insist that the fees should be increased.

You may have a creditor who is being particularly aggressive, possibly sending in bailiffs or looking to bankrupt you. It is possible to obtain an Interim Order from the Court. This protects you from creditor action while you canvass the creditors' votes for an IVA. It would cost £140 to file an Interim Order at Court.

Certainly not! In an IVA based upon contributions, you are committing yourself to making a higher monthly payment for a longer period of time. It is important to weigh up all aspects of the situation, and choose that which is BEST FOR YOU.

I'm self employed: How can I continue to trade? The reorganisation costs could be included in the IVA, allowing you to concentrate upon moving forward to achieve a profitable business for the benefit of you, your family, your remaining workforce and your creditors. Who will pay the staff I make redundant? Arrears of wages, holiday pay, redundancy and pay in lieu of notice will be paid out by the Redundancy Payments Service ("RPS") to certain prescribed maximum sums. The RPS will then stand in the lieu of the employee with a claim. What will my suppliers think? Your suppliers will be happy that you are taking control of your situation. Experience has shown that suppliers will be willing to continue to trade with you, but normally with little or no credit being extended. It is therefore important that any cash flow forecasts are prepared on this assumption. Funding will be key to the success of the future business.