An IVA can be used as a viable alternative to bankruptcy, when the circumstances allow and when it can be shown to produce a better return to the creditors.  An IVA proposal will need to be prepared and a meeting of creditors convened to consider and vote on the proposal.  A successfully proposed IVA will bind all creditors even if some of them do not approve the proposal, so long as the requisite majorities agree.

Generally, IVA proposals will require the debtor to make monthly contributions during the course of the arrangement.  Alternatively (or additionally), a third party could make a lump sum contribution into the IVA, to enable a greater dividend to be paid to the creditors.

Please note bankruptcy could follow the IVA if the terms of the IVA are not adhered to.

Although an IVA becomes binding once approved by the debtor and the creditors, if the debtor’s circumstances subsequently change it is possible to propose a variation to the IVA.

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