The Compendium

A Comprehensive Companion for All in the Insolvency and Restructuring Profession

IVA Protocol

The protocol is a voluntary agreement, which provides a standard framework for dealing with consumer Individual Voluntary Arrangements (IVAs). It applies to Insolvency Practitioners and creditors. Where a protocol IVA is proposed and agreed, Insolvency Practitioners and creditors agree to follow the processes and agreed documentation for setting up the Arrangement.

The IVA protocol is a standard document which has the following parts:

  • set of general principles.
  • Standard terms and conditions for use in protocol compliant IVAs.
  • Legal and regulatory framework.
  • Template letter for consumers.
  • Template proposal and table of contributions.
  • Flowchart to explain the process for potential equity release.
  • Table of distributions.
  • Comparison table between Bankruptcy and IVA expected outcomes.
  • Terms of Reference.

A protocol consumer IVA can last any length of time; however, most IVAs will be

proposed for 60 or 72 months.

A person suitable for a protocol consumer IVA is likely to:

  • be in receipt of a regular sustainable income; for example, but not limited to,
  • from employment or a regular pension;
  • have several lines of credit or types of debt;
  • have uncomplicated assets.

The age and debt level of the consumer should not create a barrier, but may impact on the overall viability and suitability of any proposed IVA.

It is accepted that an IVA is a regulated process under statute, which requires certain work to be undertaken, and which may have a cost unconnected with the debt and/or number of creditors of the IVA.

IVAs are unlikely to be suitable for consumers with very low levels of debt. Consumers who meet the criteria for a debt relief order may not be suitable for an