Individual Voluntary Arrangements – potential relief
Reports last week suggest potential relief may be on the way for those struggling to make payments to their individual voluntary arrangements.
The Insolvency Service has issued new guidance to insolvency practitioners (IPs) in relation to the supervision of individual voluntary arrangements (IVAs), to the effect that IPs should consider requests from individuals who want to lower their monthly payments and, in appropriate circumstances, consider whether to complete the IVA early based on contributions made to date.
The advice recognises that many existing IVAs will have been drafted under pre-pandemic economic conditions and that an individual’s ability to maintain required monthly contributions into an IVA may have been adversely affected by the current cost of living crisis.
The Guardian reported last week that many individuals could have their debts written off or monthly repayments reduced but it is important to remember that the future viability of the IVA will ultimately need to be discussed with and considered by the supervising IP and thereafter any variation will be subject to the agreement of the individuals’ creditors.
If you are struggling to maintain payments into an IVA, speak to your supervising IP as soon as possible so as to avoid the default and ultimate failure of your arrangement which could have severe consequences.
If you require advice on any aspect of personal insolvency, please contact Sarah Mower or John Bradshaw in our Insolvency & Business Recovery Team.
Sarah Mower is a chartered legal executive and specialist in Insolvency & Business Recovery at Barker Gotelee Solicitors.