The Insolvency Service has announced the publication of a new Individual Voluntary Arrangement (IVA) protocol following research that was undertaken in 2024 that showed that 60% of all IVAs that were both registered and terminated between 17th September 2021 to 17th September 2023 were subject to poor take-on practices and that 75% fell below the best practice threshold in some respects. The new protocol is a web-based publication and can be viewed here. It takes effect from 1 June 2025 and is designed to provide greater clarity for IVA providers as to what is required of them to meet best practice and greater information to consumers entering IVAs and to their creditors.
A key feature of an IVA under the new protocol is that it will not include any proposal requiring the consumer to realise their interest in a family home for the purpose of contributing to an IVA. Where a protocol IVA is used, the Nominee should be satisfied that the consumer either does not hold a beneficial interest in a family home, or that it is appropriate to exclude the property interest, based on either value or the consumer’s circumstances. The reasons for the exclusion of an interest in a family home must be explained in the IVA proposal. The protocol contains procedures for valuing property and calculating equity and different procedures apply if the equity held by the consumer is more that £10,000 but the principle remains the same that, if a protocol IVA is appropriate, the family home is excluded unless it is sold voluntarily during the period of the IVA.
Although we are not insolvency practitioners, we have considerable experience in advising in business and farming related disputes, including where debt or insolvency is a contributing feature. We also undertake receivership work under the Law of Property Act 1925 or as court appointed receivers where oversight to realise assets in the winding up or restructuring of business or other assets is required.
