Individual Voluntary Arrangement is a formal procedure under Bankruptcy Ordinance to provide a bankruptcy alternative. It involves applying for a unique voluntary arrangement by the debtor in the court through an insolvency practitioner specifically mentioning his repayment proposal to the court and the creditors. Suppose the repayment proposal of the debtor is accepted by the creditors and approved by the court. In that case, the court will pass an interim stay order on bankruptcy or other legal proceedings against the debtor, and Individual Voluntary Arrangement will be binding on all the creditors. In other words, it is an arrangement between the debtor and the creditors to pay all or part of the debts. The debtor nominates an “insolvency practitioner” who has relevant experience and qualifications; usually, an accountant or a solicitor is appointed. The insolvency practitioner is the nominee of the debtor who presents a repayment proposal to the creditors. If accepted, then he will serve as supervisor of the Arrangement. An IP will charge a fee for negotiating with the creditors and managing IVA. An IP can help a debtor work out how much he can afford to repay. 
An Individual Voluntary Arrangement has advantages for both the debtor as well as creditors. A debtor will be relieved of the stigma of bankruptcy, will be free from bankruptcy restrictions and may continue to retain his professional position. Compared to bankruptcy, the creditors may expect a better repayment from the debtor as he has more incentives to make repayment of his debts. If the debtor fails to comply with the obligations under the IVA, the nominee or any of the creditors may petition for his bankruptcy. If a debtor comes into money during their IVA, this will typically be taken and paid to the creditors. 
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