An Individual Voluntary Arrangement (IVA) is an agreement with your creditors to pay
all or part of your debts. You agree to make regular payments to an insolvency
practitioner (IP), who will divide this money between your creditors. This is paid
typically over a 5 year period and the remainder of your debt is written off.
How do I get an IVA?
You must use a licenced insolvency practitioner toIndividual Voluntary Arrangement (IVA)
Your insolvency practitioner works out what you can afford to repay and how long the IVA lasts.
You’ll have to give details about your financial situation, e.g. your assets, debts, income and creditors.
Your insolvency practitioner will contact your creditors. The IVA will start if the creditors holding 75% of your debts
agree to it. It will apply to all your creditors, including any who disagreed to it.
Advantages of an IVA
An IVA is a way to avoid bankruptcy proceedings and property repossession.
An IVA allows you to make one affordable fixed monthly payment.
Legal action by your creditors is stopped as long as you maintain your IVA monthly contribution.
The interest on your debts is frozen as at the date of the creditors meeting.
You could become debt free in 5 years.
Disadvantages of an IVA
Your credit rating will be adversely affected throughout your IVA and usually, for an additional year after completion.
Failure of an IVA can result in creditors petitioning for your bankruptcy.
Not all debts can be included in an IVA, such as court-imposed penalties/fines.
If you come into any extra money whilst in your IVA, this will be taken into account and you could be expected to pay any windfall into your IVA as well