Individual voluntary arrangements

An individual voluntary arrangement (IVA) is a mechanism by which a debtor can enter into a binding agreement with their creditors (and possibly third parties) for a composition of the debtor's liabilities or a scheme of arrangement of their affairs. The relevant provisions are set out in Part VIII of the Insolvency Act 1986 (IA 1986) and Part 8 of the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024.

IVAs are proposed in circumstances where an individual is in financial difficulties, and often following the presentation or threat of a bankruptcy petition against the debtor, although it is possible for an undischarged bankrupt to propose an IVA (which if approved will allow the bankrupt to apply to have the bankruptcy annulled).

The terms contained in an IVA are a matter for the debtor and their creditors, and are drafted with the assistance of an insolvency practitioner (IP) (described as the nominee before the IVA is approved)—see Precedent: Framework of a proposal for an individual voluntary arrangement. An IVA proposal must contain the information set out in IR 2016,