Individual Voluntary Arrangement (IVA)
An IVA is a formal arrangement with all the unsecured creditors you owe money to. The agreement made between you and your creditors could result in you not paying back the full amount. You could write off up to 100 per cent of the debts you cannot afford to pay. The alternative to an IVA could be bankruptcy.
IVAs can be a way forward for both personal debt or sole traders and business partnerships, where short term cash flow problems have been encountered but the business remains viable and profitable.
An IVA usually lasts for five years and over this period you will be expected to contribute a monthly payment into the IVA scheme fund. The level of this contribution is decided by you in conjunction with your Insolvency Practitioner. This amount must be affordable by you and agreed by your creditors. These funds are then paid out to your creditors on a periodic basis throughout the term of your IVA.
Good for you
IVAs have many benefits. Your home would be protected from any action by unsecured creditors; your debt would be repaid in affordable monthly repayments; your current debts must stay the same and cannot increase.
All interest and charges will be frozen so your current debts will not increase, bailiffs will be prevented from calling and it will prevent bankruptcy proceedings on existing debts.