Conduct of the Individual Voluntary Arrangement IVA

The Insolvency Practitioner’s (IP's) role as ‘supervisor’ of the IVA is to implement it and ensure that the client carries out her/his side of the arrangement as agreed, seeking guidance from the court if necessary. The supervisor will arrange the sale of any assets that need to be sold and collect the payments due from the client, and distribute them to the creditors. If the client’s circumstances change, it may be possible for the original agreement to be modified at a creditors’ meeting. The supervisor may be able to extend the period of the IVA to enable the client to complete the payments. IVAs often make provision for such eventualities.

Provided the client complies with the IVA s/he will be discharged from her/his liability to all creditors covered by the IVA at the end of the period. The IVA will not, however, automatically discharge any co-client, including the person’s spouse or partner. And provision for this will have to be specifically included and agreed. However, unless the joint income is used to fund the IVA (or the partner/spouse has no income), creditors may challenge the IVA as unfairly prejudicial.

If the terms of the IVA are not complied with, then the arrangement will usually provide for the supervisor to petition for the client’s bankruptcy.