Section 16 of 16

Legal aspects and your rights

The legislation governing IVAs, your rights as a debtor, how to complain about your Insolvency Practitioner, and the court’s role under the Insolvency Act 1986.

The legislation

Individual Voluntary Arrangements are created and governed by:

  • Insolvency Act 1986, Part VIII (sections 252–263): Primary legislation establishing the IVA framework — who can propose an IVA, the roles of Nominee and Supervisor, voting requirements, and the effect of approval.
  • Insolvency Rules 2016 (SI 2016/1024): Procedural requirements in detail — how notices must be served, how the decision procedure works, what the Supervisor must report, and so on.

Additionally, guidance from the Insolvency Practitioners Association (IPA) and standard terms agreed within the industry influence how IVAs are conducted in practice, though these are not statute.

Scotland is different

The IVA framework applies in England, Wales, and Northern Ireland. In Scotland, the equivalent formal debt solution is the Protected Trust Deed under Scottish insolvency law. Scottish residents should seek advice from the Accountant in Bankruptcy (AiB).

Your rights as a debtor

As someone in an IVA, you have important rights, including:

  • To receive a copy of your IVA proposal and all related documents
  • To receive regular statements of your IVA account showing payments received, fees charged, and dividends paid
  • To be kept informed of material developments
  • To have your annual review conducted fairly and within a reasonable time
  • To challenge decisions you believe are unfair or outside the terms of the proposal
  • To apply to the court under section 263 of the Insolvency Act 1986 if you believe your Supervisor is acting unfairly or in breach of their duties
  • To complain to your IP's regulatory body if you have a legitimate grievance not resolved by the firm

The role of the court

Under section 263 of the Insolvency Act 1986, the court has power to revoke or suspend the IVA if it was obtained by fraud or there was a material irregularity; give directions to the Supervisor; remove a Supervisor not fulfiling their duties; and intervene in disputes between the debtor and Supervisor. Bringing a court application is a serious step involving legal costs. Seek independent legal advice before making an application. Challenges on grounds of material irregularity must generally be brought within 28 days of the approval decision.

How to complain about your IP

  1. Raise it with your IP directly — put your concern in writing, state what happened, what should have happened, and what outcome you seek. Keep copies of all correspondence.
  2. Use the firm's formal complaints procedure — all authorised insolvency firms must have a complaints process.
  3. Escalate to the regulatory body — if unresolved within a reasonable time (typically eight weeks), refer to the body that authorises your IP.
  4. Contact the Insolvency Service — which can investigate serious complaints including misconduct.

The Insolvency Service

The Insolvency Service is an executive agency of the Department for Business and Trade. Its functions relevant to IVA debtors include maintaining the Individual Insolvency Register, investigating complaints about IPs, taking disciplinary action against IPs who breach their obligations, and providing information about insolvency processes. You can access the register and contact the Insolvency Service through GOV.UK.

Free independent advice

If you want independent guidance, free advice is available from:

  • Citizens Advice — Free, confidential advice on debt and insolvency. Available online, by telephone, and in person at local offices.
  • StepChange Debt Charity — A specialist debt charity providing free advice on all forms of debt and insolvency. They do not charge fees.
  • National Debtline — Free telephone and online debt advice, run by the Money Advice Trust.
  • MoneyHelper — A government-backed service providing free financial guidance.

These organisations are independent of your IP and can provide an impartial perspective. If you are concerned your IVA is not being conducted properly, speaking to one of these services is a sensible starting point before taking formal action.