Coronavirus (COVID-19) Guidance for Protocol IVA’s

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The Government has recently released guidance on how Individual Voluntary Arrangements (“IVA's”) should be handled during the Coronavirus (COVID-19) pandemic so as to provide options to consumers who are struggling to adhere to the terms of their arrangements.

This guidance can be used for any existing protocol consumer IVA and any IVA that has been drafted after 20 April 2020 and shall remain in effect until 20 April 2021.

A summary of the key points are as follows:

New IVA’s

  • If an IVA is being proposed due to financial distress because of the COVID-19 pandemic, this and the sustainability of the arrangement should be explained in the proposal.

  • Income from Government backed financial support schemes during the COVID-19 pandemic can be included in the proposal as income.


Existing IVA’s

  • From 7 September 2020  and subject to the discretion of the supervisor, the consumer may be allowed to reduce payments by up to 50% and to take payment holidays for up to 6 months.

  • Any payment reduction or holiday should be granted initially for a maximum of 3 months followed by a review by the Supervisor. A further 3 months may then be granted. This review should consider whether a return to payments at a reduced rate is possible prior to agreeing an additional payment break.

  • Any payment holiday requested as a result of the COVID-19 will not affect the ability of an individual to request further payment breaks in accordance with the terms of their IVA.

  • No attempt should be made to realise a consumer’s home equity under paragraph 9 of the protocol during the pandemic unless the consumer agrees to proceed.

You can view the full published Coronavirus Guidance by clicking on this link.


If you are already in an IVA and are unsure whether this guidance could apply to you, you should contact the Supervisor of your arrangement to discuss your options.


Should your existing IVA fall outside of the scope of a Protocol IVA then you are still able to request a reduction in payments and seek payment holidays however you will have to put forward a variation to the arrangement for consideration by creditors in order to do so.


This will involve your Supervisor requisitioning a decision procedure at which creditors will vote to either accept or reject the proposed changes to the arrangement.


For further information on IVA's, the rules and rights for creditors voting in an IVA and to see an example of an IVA proposal please visit the links below:


●      What is an Individual Voluntary Arrangement?

●      Voting Rules and Rights in an IVA

●      Example of an IVA Proposal


If you have been affected by the Coronavirus outbreak and you think that an IVA might be a suitable option for you, please do not hesitate to contact us on 01326 340579 to book a free telephone meeting with one of our Insolvency Practitioners.