The legislation behind an IVA
IVAs entered legislation as part of the Insolvency Act in 1986 and were introduced, primarily, to act as an alternative yet 'formal' debt solution to Bankruptcy.
At the time of the introduction, it was believed the economic climate was stifling the entrepreneurial spirit that the Prime Minister Margaret Thatcher was trying to instill.
She wanted to provide a 'formal' debt solution that would offer protection to businesspeople from having to resign as Directors in other businesses, in the event their start-up ventures failed.
Over the past 25 years or so, IVAs have evolved into a much broader debt solution than Mrs Thatcher could probably have ever imagined.
Still utilising the same legislation as a foundation, IVAs have been streamline through the introduction of the IVA Protocol in 2008 and now serve as a mainstream debt solution to the masses, with nearly 50,000 opting for an IVA last year alone.
Whilst the profile of the individuals using an IVA will have undoubtedly changed over the past 25 years, the benefits that an IVA provides are still extremely relevant to the people that use them.
At the heart of the IVA legislation is the level of legal protection afforded to the debtor, which enables them to still function without the fear of their assets being seized or their income being compromised.
The structure of the IVA is such that all parties have a degree of advantage that outweighs the bankruptcy alternative. This balance of 'fairness' is outlined in the terms and conditions of an IVA, where expectations are clearly defined for both sides.
The standard terms and conditions of the IVA will vary little from case to case but, when necessary, any disputes will be settled with the intervention of the IVA Supervisor.
The IVA supervisor is a licensed Insolvency Practitioner who's acting as an officer of the Court and someone entrusted to administer the IVA for its full duration.
The standard terms of an IVA are listed in the IVA proposal, the document which outlines the offer being made to creditors at the Creditors' Meeting.
In the event of a dispute, it is advisable to refer to the standard terms of the proposal as the IVA Supervisor will draw their interpretation from that document.
Professional IVA Advice
If you are looking to enter an IVA but would like to have a chat with a professional adviser before you commit yourself to the process, please call 0800 088 7503 or, alternatively, complete this form and one of our advisers will call you at your preferred time.