What is an IVA
An Individual Voluntary Arrangement or IVA, allows a debtor an alternative to bankruptcy by coming to an agreement with his creditors to pay off a percentage of his debts over an agreed given period.
Basically, an IVA is a bargaining process between the individual, the insolvency practitioner and the creditors. The debtor will usually pay a series of monthly payments.
The repayments are calculated through an analysis of the debtor's income and expenditure. Once agreed, the repayment scheme forms part of a legally binding contract, although the creditors can still force the debtor into bankruptcy they do not meet their terms of the deal. Also, an IVA can only proceed if 75% or more of the creditors agree to the deal.
As far as the debtor is concerned, an IVA can offer many advantages. You can avoid bankruptcy and the severe penalties associated with this. For people whose jobs and careers could be put at risk by bankruptcy, an IVA is an attractive alternative.
Please see our IVA Frequently Asked Questions page for more information.
The Financial Helpline can offer you free friendly advice on IVAs by calling 0800 389 6339 or by filling out our Call Back Form.
