This is invariably a creditor-driven process, which follows a bankruptcy order made by the court, usually on the petition of a creditor. It is a creditor's action of last resort in attempting to collect an outstanding debt. A debtor may also present a petition for his or her own bankruptcy.

Individual voluntary arrangement

A flexible process which is essentially a contract between an individual and their creditors to "park" debt in such a manner that allows an eventual greater return to creditors, albeit often over time, than they could expect in a bankruptcy.

A proposal is prepared within a statutory framework that needs to be approved by the individual and their creditors as must any proposed modifications to the original proposal.