We have the experience in being accepted by the High Court of Hong Kong as Nominee for IVA. Advantage of debtor in IVA For IVA, debtor may be able to have a greater control on all the assets such as the personal pension and the family home. For high income earner, the debtor in general can retain a greater proportion of income than would be the case in bankruptcy; The requirements for getting IVA proposal approved is not less than 75% by value of creditors' approval and not less than 50% by value of non-associate creditors. If the IVA is approved, all creditors notified of the meeting and entitled to vote will be bound by its terms. This may include creditors such as landlords who, although generally entitled to distrain in bankruptcy, will not be able to exercise this remedy. IVA is particularly suitable for professionals such as accountants or lawyer. This is because the carrying out of an IVA does not bar them from continuing their profession. Given the cost involved, IVA is more popular among high income debtors and partner. It will be easier for the debtor to remain in business. The debtor will not be disqualified as a director under the Companies Ordinance. Partnerships will not automatically dissolve. Statutory restrictions on obtaining credit and revealing name under which the person is adjudicated bankruptcy do not apply. However, IVA debtor normally is not allow to obtain any further credit during the IVA period. IVA is not to be treated as bankruptcy. The debtor normally is given a much higher regard than in case of bankruptcy. The debtor is bound by the content of the proposal. Advantages for the creditors in IVA Creditors is able to receive a much greater dividend rate (usually at almost 100 cents per dollar debt) than they would in bankruptcy. Creditors normally starts to obtain dividends within 1 to 2 months upon their approval of the IVA. Whereas in bankruptcy, they normally start to receive dividend 1 year after the commencement of the bankruptcy. IVA usually at a much lower costs because: No Official Receiver fees as there are in bankruptcy; and No mandatory banking of funds in the Official Receiver controlled bank account. Realisations can therefore be banked in interest bearing accounts. Usaully the debtor can continue practicising a profession or running a business, hence is able to continue to generate revenue to service the dividends. There is great efficiency than in bankruptcy given the lower level of regulatory involvement. The automatic discharge period for a first bankrupt is 4 years. In IVA, the creditors normally would request for 100 cents per dollar debt dividend. Hence, the IVA period could be set at a much longer period. It is not uncommon to have the IVA period of up to 7 or 8 years to maximize the creditors' benefit. For creditors there is the possibility of more significant contributions from income than would be available in bankruptcy. The creditors normally will appoint their own practitioner as nominee, hence the creditors can have a greater control over the debtor and all relevant matters. Timetable for IVA   Date Action to be taken Action by Day Commencement of IVA     1a A statement of affairs should made up to a date no earlier than 2 weeks before the date of the notice to the intended Nominee Prepare proposal and a statement of affairs Debtor 1b   Notice to intended Nominee together with a proposal of IVA Debtor 8 Within 7 days after submission of proposal to intended Nominee Submit a statement of affairs to Nominee Debtor Application for an Interim Order 1a   Submit application for an Interim Order together with an affidavit Solicitor 1b At least 3 days before the Court hearing Notice of hearing to creditors (petitioned bankruptcy) and nominee Debtor An Interim Order granted (14 days) 1a Once an order has been made Submit copy of Interim Order to Nominee and Official Receiver Debtor 1b -ditto- Give notice of the making of the order to any person given notice of the hearing who was not present or represented at it Debtor   -ditto- The debtor must prepare a statement of affairs up to a date no earlier than 2 weeks before the date of notice of the intended nominee Debtor 11a At least 3 days before the expiry of the Interim Order Submit the Nominee's report on proposal to the Court Ak 11b -ditto- Send the Nominee's report to any person who may have presented a bankruptcy petition Ak Conduct of creditors meeting 25a At least 14 days before the proposed date of meeting Notice of the creditors' meeting to creditors Ak 25b -ditto- Published the notice in English and Chinese language newspapers Ak 53 14 days after the date of filling of the Nominee's report and within 28 days after the hearing of consideration of the nominee's report Creditors' meeting is held. Votes are calculated according to the amount of the debt as at the date of the meeting Ak 67a In the event of adjournment, a final meeting must be held within 14 days after the date of the original meeting Final creditors' meeting to obtain agreement for proposal is held Ak 67b Once a person is appointed after voluntary arrangement approved Submit the notice of appointment to act as Nominee to Official Receiver Ak 74a Within 7 days after the creditors' meeting Submit the chairman's report to the Court Ak 74b Once submitted chairman's report to the Court Report to Official Receiver the identity card number of the debtor, the date on which the proposal was approved and the name and address of the nominee Ak Implementation and supervision of approved voluntary arrangement Year 1 to year 4 after approved voluntary arrangement After every 12-month period Submit the Nominee's accounts and reports to the same court Year 1 to year 4 after approved voluntary arrangement After every 12-month period Submit the Nominee's accounts and reports to the debtor Year 1 to year 4 after approved voluntary arrangement After every 12-month period Submit the Nominee's accounts and reports to the creditors who are bound by the arrangement Completion of the arrangement 28 days after year 4 Within 28 days after completion of the voluntary arrangement Send notice of completion of the arrangement and a report by nominee summarizing all receipts and payments to all creditors who are bound by the arrangement Send notice of completion of the arrangement and a report by nominee summarizing all receipts and payments to the court and the Office Receiver