What is a SIVA? - Simplified IVA

A Simplified IVA is basically a new form of IVA (Individual Voluntary Arrangement), which is a moethod of clearing debt without being declared bankrupt. A normal IVA is only available for people with debts over �15,000, but is generally used when debt levels are higher - often in the range of �60-70,000. There is no real upper limit to the debts that can be handled with an IVA.

A Simplified IVA system, when launched by the Government, is likely to have two tiers. Tier 1 will have an upper limit of �25-30,000, and Tier 2 a upper limit of �75,000. Also, the approval of an SIVA based on the number of creditors that must agree to the SIVA is lower that a traditional IVA, so more are likely to be approved. A SIVA 1 agreement will not need a majority vote to proceed, if it is deemed to be a better option that bankruptcy. A SIVA 2 will continue to require a vote, but will only need a 51% agreement from the creditors, rather than the current 75%.

The plans for SIVAs have been going through various stages of construction by the government for a while yet, but SIVAs are expected to finally launchduring 2007. As final details become known, we will be monitoring and reporting on the situation.