If approved by the majority of unsecured creditors, all creditors will be bound by the IVA agreements terms even if they voted to reject the proposal.
An IVA solution is supervised by a Licensed IVA Insolvency Practitioner ('IP') under a strict regulatory regime. Part of this regime is that the IP is required under such regulation to provide individuals with the best debt advice and IVA advice to choose between an IVA or bankruptcy.
In necessary circumstances protection can be sought from the courts where enforcement proceedings for business bankruptcy are ongoing or where a bankruptcy petition is imminent.
There is a standstill on interest being charged to your business liabilities and an embargo on any collection from your Bankruptcy bank account by creditors whilst the company IVA or self employed IVA is in place
All unsecured debts are dealt with collectively and there is generally one single payment to be made.
Your circumstances will be taken into account when arriving at the monthly sum payable.
There is likely to be an element of debt forgiveness under an IVA insolvency and possible free debt advice from a debt advisory centre, dependent upon your circumstances.
Whilst you may be expected to realise equity in your home through refinance borrowing or remortgaging property if you own the property, this will generally be in the fourth or final year and generally the Supervisor will assist you with this.
If the personal or business IVA arrangement runs to a successful completion then any remaining balance owed to creditors will be written off, therefore your business debt or personal debt will effectively be resolved without business or company bankruptcy.
You can continue to hold office as a company director.
Negative implications
IVA's cannot affect the rights of a secured creditor and therefore they cannot be included without their specific consent.
IVA arrangements are registered in the public domain.
If you do not adhere to the terms of the personal, business or self employed IVA then you may end up with business bankruptcy.
It is likely that part of your equity in your property will have to be realised at some stage as a term of the IVA solution.
Your credit rating will be affected.
An IVA is likely to last for five years if you are paying back less than 100% of your debts.