What is Individual Voluntary Arrangement (IVA)?

According to Article 20 of Chapter 6 of the Bankruptcy Ordinance, Individual Voluntary Arrangement in Hong Kong (IVA) is an established option for people that are facing the possibility of filing for bankruptcy. The debtor needs to find a nominee (which has to be a professional accountant or lawyer) to propose a repayment proposal to the creditor which ensures that the debtor’s assets can be properly distributed to/among the creditor(s). At the same time, you can also file an application with the court for an interim order. During this period, no one can take or continue any on-going bankruptcy petition or other legal proceedings against the debtor.

The method of pursuing IVA in Hong Kong is effective, it will not only reduce your economic and psychological burden, but also avoid ruining your credit ratings or impacting your work and professional standing. You only need to submit all the required documents, and then arrange to take an oath in a lawyer’s office within 7-10 days. Our professional IVA HK team can help notify your creditors (such as banks and financial institutions, etc.) the next day to greatly reduce the unnecessary hassle from debt collection companies.

Principles of an Individual Voluntary Arrangement

Individual Voluntary Arrangement reorganizes all the current debts according to the personal and financial situation of the debtor through its registered legal representatives and accredited accountants. They will collectively propose a new repayment plan to the court and creditors, and arrange a meeting with creditors to negotiate and confirm on the plan. After reaching a new repayment agreement, the court will then issue an order to allow the debtor to fully repay the current debts in accordance with the newly agreed Individual Voluntary Arrangement plan. The general repayment interest rate can be effectively reduced by up to 80% compared with the original rate in some cases, and serves to greatly alleviate the financial pressure and avoid the need to file for bankruptcy while also having the ability to turn the page and start a new life.

Bankruptcy will undoubtedly destroy the debtors’ credit rating and reputation. Debtors may lose their jobs, especially if they are currently employed in industries involving finance, professional fields, roles with authority or if they are civil servants. Unlike with bankruptcy, IVA will not leave any record of bankruptcy, so it can greatly help reduce the risk of destroying one’s personal reputation, and will not be subject to any bankruptcy restrictions. For those working in professional industries, IVA in HK can be their best solution.

Application Requirements for IVA in Hong Kong:

  • Debtors who have a relatively stable income and owe an amount equivalent to more than ten times their monthly salary
  • Debtors with occupations in sensitive fields or posts, who cannot file for bankruptcy

IVA can restructure the types of HK debts below:

  • Credit Cards|Bank Personal Loan|Finance Company Loan|”One-off” High Interest Loan|Credit Union Loan|Student Financial Assistance Loan|Tax

IVA Application Process Estimated Time Frame (From date of application start date)
Phase 1
The debtor brings relevant debt and income information to start the IVA consultation and analysis process. After we have accepted the application, the nominee draws up a repayment proposal. We only accept applications with a likely success rate because there are some debt situations that are not suitable for IVA. We will be honest in reporting your situation and will not waste your time and money. Based on our wealth of experience with IVA in HK, our objective is to balance the interests of creditors and debtors to achieve a win-win situation for all parties involved. Besides recommending the debt repayment schedule (monthly amount, number of payments, and interest rates), the applicant’s basic living expenses would be listed; the applicant’s assets such as any owner-occupied property, private vehicles, insurance, pension, etc. would also be clearly listed.
Day 1
Take an oath, and then the representing lawyer will submit the application for an interim order to the court for filing Within 2 weeks
Phase 2
Court hearing to issue IVA interim order Approximately 3 weeks
Publish a notice to creditors (one each in a local Chinese and English newspaper) Approximately 3 1/2 weeks
Host meetings with creditors Approximately 4 weeks
Phase 3
If a majority of the creditors or their attending representatives agree and pass the resolution (constituting more than 75% of the total value of the debts held by these creditors or representatives), the individual voluntary arrangement would be implemented.

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