3.2 IVAs

Question 1

What are the conditions for an interim order (not breathing space) for a debtor before an IVA?

Answer 1

▪ The debtor is a bankrupt or able to apply for their bankruptcy
▪ No previous interim order application has been made in the previous 12 months
▪ There is a nominee willing to act in relation to the debtor’s proposal

Question 2

How long does an interim order before an IVA last

Answer 2

14 days unless extended (nominee must submit their report within this period)

Question 3

What must a debtor submit to the nominee?

Answer 3

Proposal and SA

Question 4

To what date may an SA be made up to?

Answer 4

Not earlier than two weeks before date of proposal (or up to 2 months with nominees agreement, or SA produced in bky)

Question 5

When can IVA proposal be amended?

Answer 5

At any time until filing of nominee’s report - with nominee’s agreement in writing

Question 6

When must nominee confirm consent to act?

Answer 6

▪ In interim order cases – at the time of the application
▪ In non-interim order cases - as soon as reasonably practicable after receipt of the
proposal

Question 7

What must nominee’s report on proposal confirm?

Answer 7

required to explain whether, in his
opinion:
▪ the proposal as a reasonable prospect of being approved and implemented
▪ The creditors should or should not be invited to consider the proposal

Question 8

Where must nominee’s report be filed?

Answer 8

Report filed in debtor’s local County Court only in interim order cases
▪ The court will extend the interim to beyond the date of the creditors’ decision; or
▪ Discharge the interim order if the report is negative

Question 9

by when must a decision date be set to consider proposal?

Answer 9

Decision date must be a maximum of 28 days from:
▪ Interim Order date; or
▪ Receipt by the nominee of the proposal and statement of affairs

Question 10

How many day’s notice of decision date be given to creditors?

Answer 10

Minimum of 14 days

Question 11

What is the cut off date between new and old rules?

Answer 11

April 2017

Question 12

What is required to be admitted as a creditor?

Answer 12

No statutory definition of an IVA debt:

R3 Conditions specifically apply the bankruptcy definition

▪ Protocol SCs define an unsecured creditor as
“…ANY CREDITOR, except a secured creditor, who is your creditor for any reason that
originated or occurred on or before the time and date of approval of the
arrangement;”

Question 13

What is the requirements of proof of debt?

Answer 13

the convener or chair having been notified in writing of the debt

Question 14

What date is the relevant date for calculation of voting rights ?

Answer 14

aa) at the date of the interim order, where there is an interim order in force,
(bb) otherwise, at the decision date,

(ii) where the debtor is an undischarged bankrupt, at the date of the bankruptcy
order.

(3) But in relation to a proposed ….IVA, a debt of an unliquidated or unascertained
amount is to be valued at £1 for the purposes of voting unless the convener or chair…decides to put a higher value on it.

Question 15

What are the requisite majorities for a proposed IVA?

Answer 15

three-quarters or more (in value) of those responding vote in favour of it;
Subject to
(b) a decision is not made if more than half of the total value of creditors who are not
associates of the debtor vote against it

Question 16

What is the meaning of associate?

Answer 16

Current, former or reputed husband, wife or civil partner

▪ A relative of the individual or the individual’s (current or former) husband, wife or civil partner, including:

▪ brother, sister, uncle, aunt, nephew, niece, lineal ancestor or lineal descendant

▪ A business partner and their (current or former) husband, wife, civil partner or other relatives

▪ Employers / employees
▪ A director is treated as an employee

Question 17

*

Answer 17

the 2nd stage of calculating the vote will be:
Value of unconnected creditors who voted against proposal / Value of unconnected creditors who have SENT WRITTEN CLAIM claim
= < 50% - decision made / = > 50% - decision not made

Question 18

How long does nominee have to file report on the DMP to consider an IVA?

How long does the nominee have to give notice of the outcome of the decision considering an IVA proposal?

Answer 18

4 days

4 days if no interim order
ASARP if interim order

Question 19

Who can challenge an IVA?

Answer 19

▪ The debtor
▪ A creditor who was entitled to vote or would have been, had they received notice
▪ The supervisor
▪ Where the debtor is an undischarged bankrupt, the OR or trustee

Question 20

How long do parties have to challenge a decision relating to consideration of the IVA proposal?

Answer 20

▪ 28 days of the decision (in non-interim order cases); or

▪ Within 28 days of filing the report on the outcome with the court (interim order cases)

▪ For creditors who did not receive notice of the proposal, the 28 day challenge
period runs from the day on which they became aware of it

Question 21

What is the effect of an IVA?

Answer 21

Any interim order ceases to have effect and any bankruptcy petition which was
stayed by the interim order is dismissed

▪ Where the debtor is an undischarged bankrupt, they or the official receiver may
apply for annulment

Question 22

What else must a nominee do when an IVA is approved?

Answer 22

the nominee must report to the Secretary of State
▪ The identification details of the debtor
▪ The debtor’s gender
▪ The debtor’s date of birth
▪ Any other name by which the debtor was or is known
▪ The date on which the IVA was approved
▪ The name and address of the supervisor

▪ A fee of £15 is payable