IVA

An Individual Voluntary Arrangement (or IVA) is a formal arrangement which is legally binding on both yourself and your creditors. An IVA is agreed at the county court and arranged through an insolvency practitioner.

Once the arrangement is accepted your creditors may not pursue you for these debts or file for bankruptcy provided you maintain the agreed payments.

The outstanding amounts can be reduced substantially depending on your ability to pay. You in turn will agree to make pay a fixed monthly amount into the IVA for up to five years.

You may also be able to make a lump sum contribution e.g. from a remortgage if you have equity in your home. This can substantially reduce the monthly payments and in some cases it may be possible to clear the whole IVA. This is known as a full and final settlement.

At the end of the IVA you will be debt free. An IVA can be a better alternative to bankruptcy as it can help write off a substantial amount of your debts, it is not advertised and your employer need not be advised. Also you will normally be able to keep your home and the debts will be marked as satisfied on your credit file.

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