The IVA proposal sets out what is being offered to your creditors and what they can expect to receive after the costs of the IVA have been deducted.

The exact contents of the proposal will vary upon your individual circumstances, however there are a number of elements common to all IVA proposals.

Proposal Contents

The detailed contents required to be in an IVA proposal are contained within Rule 5.3 of the Insolvency Rules 1986, and Statement of Insolvency Practice No.3. A summary of these is given below.

Desirability - Why should creditors accept the proposed settlemnt plan ? This will typically include some background as to how this position was arrived at. This may also include trading accounts where applicable. Remember the IVA must provide creditors with a better financial outcome than bankruptcy.

Assets - Details of all an individuals assets, giving realistic values of each.

Liabilities - A list of all known debts. Comprising of Names, addresses, reference numbers and amount owed. Like Bankruptcy most but not quite all debts are included in an IVA, (bankruptcy debt).

Basis of the arrangement - What monies are being introduced, when and by whom.

Third party funds - If a third party is to provide monies into the IVA, this will give details of how much, from where and when such funds are to be introduced.

Future income - How monies will be generated to be introduced into the IVA.

Household income and expenditure summary - this will support the level of proposed payments to be made into the IVA.

Voidable Transactions - Details of any previous actions that could be challenged if you were to be made bankrupt.

Proposed Duration - How long is the arrangement going to last ? This will depend upon your individual circumstances, however the maximum duration is normally 5 years (60 Months).

Details of the Nominee - And details of his/her costs for acting as [[Nominee]], and any other costs that need to be paid in connection with presenting the proposal to your creditors.

Details of the proposed Supervisor - Who will be the Supervisor of the arrangement, and what are his/her estimated costs, and any other estimated costs.

Estimated dividend to creditors - What percentage of the debts can creditors expect to reveive ? This will be expressed as “x” pence in the £.

Comparison of the estimated outcome - i.e. Bankruptcy V’s the IVA, which will show that creditors will receive more money from the IVA.

Other matters would include provisions of what happens if the IVA defaults (fails) or you have a change of circumstances during the arrangement. obligations of you and the Supervisor and so forth.