Individual Voluntary Arrangements And Fast Track Voluntary Arrangements

Extracts from the Myvesta UK Forum:

Question....


Hi, Can anyone tell me what is the difference between an Individual Voluntary Arrangement and a Fast Track Voluntary Arrangement is? My husband has just been made bankrupt by a supplier an he has been told that he can get out of bankruptcy by doing a Fast Track Voluntary Arrangement. All I seem to be able to find on the internet is information about Individual Voluntary Arrangements. Are they the same thing?

Thanks in advance

Emma

Answer......

Hi Emma,

A Fast Track Voluntary Arrangement (FTVA) is a binding agreement with your creditors to pay all or part of the money you owe them. You can only enter into it after you have been made bankrupt.

In an FTVA the Official Receiver acts as nominee; that is, he (or she) helps you prepare a proposal to put to your creditors and, if they accept the proposal, acts as supervisor, looking after the arrangement and making payments to your creditors in accordance with your proposal.

The Official Receiver's fee to act as nominee is £300, and as supervisor he also charges 15% of all sums realised. In addition, you will have to pay a registration fee of £35 for your FTVA to be recorded on the public register of all Individual Voluntary Arrangements.

An Individual Voluntary Arrangement (IVA) begins with a formal proposal to your creditors to pay part or all of your debts. You need to apply to the court and you must be helped by an Insolvency Practitioner. Any agreement reached with your creditors will be binding on them.

See: http://myvesta.org.uk/programmes/myvesta_iva.html

The IVA Process is as follows:

First, find an authorised insolvency practitioner prepared to act for you as supervisor of the arrangement.

Then you may apply to the court for an “interim order”. This prevents your creditors from presenting, or proceeding with, a bankruptcy petition against you while the interim order is in force.

It also prevents them from taking other action against you during the same period without the permission of the court. However, you do not have to apply for an interim order to put a proposal for a voluntary arrangement to your creditors.

The insolvency practitioner tells the court the details of your proposal and whether in his or her opinion a meeting of creditors should be called to consider it.

If a meeting is to be held, the date of the meeting and details of the proposals are sent to your creditors. Where the creditors’ meeting approves your proposal this will bind every creditor who received, or who was entitled to receive, notice of the meeting.

At the meeting, the creditors vote on whether to accept your proposals. If enough creditors (over 75% in value of the creditors present in person or by proxy, and voting on the resolution) vote in favour, the proposals are accepted.

They are then binding on all creditors who had notice, or were entitled to receive notice, of the meeting.

The Insolvency Practitioner then supervises the arrangement and pays the creditors in accordance with the accepted proposal.

Hope this helps Emma.
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Kind regards

Sean

http://www.myvesta.org.uk
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