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Responding to an IVA


If you are owed money by someone who proposes entering into an Individual Voluntary Arrangement, no bankruptcy petition may be presented or proceeded with and no other legal action can be taken to enforce payment of the debts whilst the IVA is in force. If you are unfairly prejudiced by this, or the IVA was not properly approved, you may have grounds to challenge this.

When can the making of an IVA be challenged?

There are 2 possible grounds of objection:

  • The IVA is unfairly prejudicial to your interests as a creditor
  • There was a material irregularity at or in relation to the creditors’ meeting.

Any decision made at the creditors meeting may be challenged by an application to the court within 28 days of the filing of the chairman’s report to the court or from the date on which you first became aware that a meeting had taken place, if you were not given notice of it.

If the court is satisfied that the creditor making the application has been unfairly prejudiced or that there has been a material irregularity, the court can:

  • Revoke the approval of the IVA
  • Summon a further meeting of creditors
  • Rule that the aggrieved party is not bound by the IVA
  • Direct that certain action is taken to rectify the IVA

False representations

It is a serious criminal offence to make a false representation or do anything fraudulent in order to obtain approval for an IVA. 

This may take the form of a misleading statement in the proposal as to the extent of the debtor’s assets or debts. If the supervisor becomes aware of something of this kind, he or she must report it to the Secretary of State. An IVA which came about as a result of such conduct could be terminated and a bankruptcy petition could be presented by the supervisor.

When can the operation of an IVA be challenged?

During the course of the IVA any creditor who is dissatisfied with a decision, act or omission of the supervisor may apply to the court.  The court has the power to:

  • Confirm, reverse or modify any decision of the supervisor
  • Give directions to the supervisor
  • Make any other appropriate order.

Taking legal advice

An application to the court on the grounds that you are dissatisfied with the decision of other creditors to approve an IVA or you are unhappy with the way it is being run, is not without risk.  You could be required to pay the costs of the supervisor or other party to the application. Taking good legal advice as to how to enforce your rights is important.

For more information proceed to Entering into an IVA

For more information, please contact our team of experts by emailing insolvency@bankruptcy-solicitors.com or call 020 8308 3610 today.

Meet the Responding to an IVA team