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Individual voluntary arrangements are legally binding agreements between borrowers and their creditors.

When people enter an IVA, they agree to pay all or part of their debt back to their creditors at an affordable rate over a fixed duration of time, usually five years.

After this time period, the remaining debt is written off.  Individual voluntary arrangements  are a widely preferred debt solution in the UK.

The first step in securing an IVA is to work with a licensed insolvency practitioner and create an IVA proposal. This proposal will then be pitched to creditors who will vote on it.

As you can tell by now, your IVA proposal is a crucial document. If enough of your creditors accept it, your IVA will come into effect.

Since getting your IVA proposal right is key to negotiating a successful arrangement with your creditors, let’s take a closer look at what an IVA proposal is, its core components, and basic structure.

What is an IVA Proposal?

An IVA proposal is a formal and legal document that contains details of an IVA applicant’s offer to their creditors.

A good IVA proposal is not only agreeable for the creditors but also sustainable for the borrower. Income, living expenses and the financial conditions of the borrower must be factored into any repayment plan.

An IVA proposal contains an offer for an affordable rate of repayment based on all these factors. It also gives borrowers a chance to explain their circumstances to creditors and agree with them on a workable solution.

The IVA is a formal document that spells out terms and conditions based on which an IVA is secured, there is little margin for errors. The more realistic your proposal is, the more likely it is to get accepted.

Who Prepares the IVA Proposal?

Since the IVA is a legal document, you cannot prepare it yourself. Only a licensed insolvency practitioner (IP) can help you set up an IVA and prepare a proposal.

An IVA proposal is usually prepared by an IVA drafter, a member of your IP’s team. An IVA drafter ensures that your proposal covers all the relevant details of your offer and you do not miss out on anything.

What to Include in an IVA Proposal?

An IVA proposal usually contains an overview of your personal and financial situation as well as your proposed offer. The key components of an IVA proposal include:

Your Basic Information

This section includes your basic information. It must give your creditors a rundown of your assets and liabilities so they can get an overall sense of your current financial condition.

Your IVA Payment

A repayment plan forms the essence of your IVA offer. It covers what you can afford to repay your creditors every month and for how long.

Your Circumstances

Your IP will include comments on your proposal and the financial situation in this section. They will appraise your creditors of any major circumstances that have affected your finances in the past or any plans that may affect your future earnings.

The Path Ahead: Creditor’s Meeting

After your IP has worked with you to draft an IVA proposal, they will convene a meeting of your creditors so your IVA proposal can be discussed and voted on.

A copy of your IVA proposal is also forwarded to each of your creditors so they can review it and vote on it in the meeting. They may also request that you make some changes to the proposal before they approve your offer.

Your IP is responsible for finalising your IVA proposal, offering you guidance throughout the process, and getting it approved.

If you have any questions regarding your IVA or are not clear on the terms of your proposal, feel free to ask your IP for help. Make sure you are clear on every term before sending your draft for final approval from creditors.

Basic Structure Outline for an IVA Proposal

IVA proposals have the same basic format, but they may vary largely in terms of the actual offer and conditions.

While you do not have to worry about drafting the actual proposal yourself (your IP will do it for you), knowing the basic format of an IVA offer can help you enormously.

An IVA consists of:


Personal information such as the name and address of the IVA candidate as well as their reason for applying

Background to Proposal

A brief section that includes details such as the applicant’s age, marital status, their dependents and a condensed history of their financial circumstances


Information about the applicant’s accommodation, overall income, vehicles, belongings, and assets or equity

Outline of the Proposal

A section that includes details like:

  • Overall IVA term
  • Monthly IVA contributions
  • The due process in the event of arrears
  • An outline of the annual review process
  • Information on what happens if the applicant has additional income in future
  • A complete windfall clause
  • Due process in the event of redundancy
  • List of liabilities
  • Details of payment break


Creditor Details

This section covers creditor information like how much they are owed and their rights for receiving IVA payments

Legal Obligations

This section covers details of the applicant’s legal obligations during the IVA term. These may include the use of credit, defense of legal proceedings, and change of address if any.

Information Required to Be Disclosed

This section includes details of any changes made to the terms of the IVA, the EC Regulation on insolvency, and the following information:

  • Any associated creditors or guaranteed debts
  • Details of any transactions at an undervalue, preferences and extortionate credit transactions
  • Details of IP fees and payments to any referrers
  • Disbursements
  • Name and Address of Nominee

Need IVA Help?

If you or your loved ones are struggling to repay their debts or regain control of their finances, We are here to help. Get in touch with our friendly and impartial specialists for resources and expert debt help.

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