BL - Insolvency Individual IVA

Question 1

What are the two personal insolvency procedures?

Answer 1

(1) Individual Voluntary Arrangements (‘IVAs’);

(2) bankruptcy

Question 2

What is the process of obtaining an IVA?

Answer 2

The debtor drafts proposals setting out a statement of their affairs (eg full details of assets and liabilities).

The nominee (insolvency practitioner) submits a report to the court.

Question 3

What percentage of Creditors need to approve an IVA?

Answer 3

Creditors holding at least 75% (by value) of the debt must vote to approve the terms of the IVA.

Must include at least 50% unconnected parties

Question 4

How can a debtor get a moratorium for an IVA?

Answer 4

• Apply to the court for an interim order.
• If the court grants the order, it brings about a moratorium,

Question 5

What does the moratorium for an IVA do?

Answer 5

Freezing existing or proposed bankruptcy and other proceedings and legal process (including execution, landlord’s right of peaceable re-entry and/or distress for rent) against the debtor, without leave (in any such case) of the court.

Question 6

How long does a moratorium for an IVA last?

Answer 6

14 days which the court can extend.

Question 7

Who is bound by an IVA?

Answer 7

The debtor and all of their unsecured creditors

Does not bind preferential & secured creditors unless they consent to the IVA

Question 8

What happens if the debtor doesn’t keep up with the IVA?

Answer 8

The supervisor can usually petition for their bankruptcy.