Individual Voluntary Arrangement
An Individual Voluntary Arrangement (IVA) is a legal agreement between you and those you owe money (your creditors). It was introduced by the Government, as part of the Insolvency Act 1986, as an alternative to bankruptcy.
You agree to pay off a percentage of your debt over a given period of time, by means of affordable repayments (normally 60 months) but over a maximum of 5 to 6 Year Period (In England and Wales).
Your debt only then is, once consolidated into one affordable monthly payment or a payment structure that suits you personally.
You are then debt-free within five years, as any outstanding debt included in this IVA no longer exists.
However, once approved, your creditors stop pursuing you for your debts, and additionally, you will know precisely when you will be debt-free.
How do I Apply for an IVA?
When you contact us we will chat about your current situation, including an assessment of your income, outgoings and your debts. This will tell us if an IVA is a good option for you.
Should an IVA be suitable – the next step is to draw up a formal proposal for consideration by your creditors.
If the proposal is approved by 75% of the creditors by value of debt the IVA is accepted and all creditors are bound by its terms. All debts are frozen so no more interest or changes can be added.
What Happens when I am in an IVA?
Creditors must not chase you for payments for any of the included debts. So, no more letters, phones calls nor threats of legal action.
Provided you maintain payments – unpaid debt is written off at the end of the IVA, which typically lasts 60 months.
Your expenditure is expected to keep within reasonable guidelines – but you won’t be asked to live in poverty.
Which Debts can you include In An IVA?
Which Debts cannot be included in an IVA?
What are the Benefits of going into a IVA (Individual Voluntary Arrangement)?
How Does An IVA Affect My Credit Rating?
Once in an IVA, you may experience difficulty, accessing short term credit. However, you possibly may obtain credit for personal household goods and services.
If you run your own business, you may access credit for business goods and services. However, higher interest charges may apply. So take care not to increase your debt.
Being in an IVA is recorded in The Insolvency Register.