IVA stands for individual voluntary arrangement and is a form of insolvency. It is an arrangement between you and your creditors that consolidates your debts into one monthly affordable repayment, at the end of your IVA which is usually 5 years any debt which is remaining will automatically be written off. An IVA is a formal debt solution meaning it is legally binding, approved by the court and your creditors must abide by the agreement.

IVA’s were introduced by the Government in the 1986 Insolvency Act as an alternative to bankruptcy. They were meant to help people whose income or assets could cause them to be vulnerable to the bankruptcy process.  For an IVA to be legally binding all your creditors, must vote to determine how many are prepared to accept your proposed arrangement.

If 75% of your creditors accept your proposal, then they will all become legally bound by the arrangement. Even creditors who voted to reject your proposal will be legally bound to its terms. Under the Terms and Conditions of an IVA, all creditors must forfeit their rights to chase you for the money owed or pursue any legal action

An IVA is a debt solution designed to consolidate your debts into one monthly affordable repayment while providing you with the protection you need against your creditors and allows you to resolve your financial issues in a structured manner. An IVA also enables you to avoid and interest charges your creditors may be adding to your debts, as all interests and charges on your debts will be frozen the amount you owe will never increase.

Rather than struggling with unaffordable debt payments to many different creditors, an Individual Voluntary Arrangement allows you to make a single affordable repayment to your debts while leaving you enough disposable income to cover all your living needs.

To set up an IVA you will need to work with a qualified Insolvency Practitioner (IP) to draw up the terms of your IVA. Your IP will also handle any contact with your creditors on your behalf. You will be required to make regular monthly payments at the amount you have agreed with the IP. The IP will then distribute these payments accordingly to all your creditors.

An IVA is one of the most popular debt solutions for people leaving in England, Wales & Northern Ireland.

However, it is important to ensure that an IVA is the best solution for your circumstance.

Here are some qualifying criteria for an IVA:

1. You must have at least two separate debts.
2. You must owe at least £7,000 in unsecured debts.
3. You have enough disposable income spare to make payments to your IVA each month.
4. You must reside in England, Wales or Northern Ireland. Note that IVAs are not available in Scotland, but there is a similar debt solution called a Trust Deed.

if you do not meet these requirements, you may still be able to get an IVA. Contact us here at your debt adviser and we will find the best solution for you.