Individual Voluntary Arrangement

An Overview

Individual Voluntary Arrangement(IVA) is a legally-binding arrangement between you and your creditors writing off up to 90% of your debts. It means reaching a compromise with your creditors to settle your debts within a reasonable, fixed period of time and at the same time, avoid the consequences of bankruptcy. Most IVAs last for five or six years.

The insolvency practitioner deals with your creditors throughout the life of the IVA.

Read more about IVA and check if you are eligible here: Individual Voluntary Arrangement. Also read: What does an IVA do to your credit record?

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You may be able to write off up to 90% of your debt.

You can also call us on our 24 hour Helpline.

Want to know more about IVA?

Watch video by Keith White, IVA.advisor from iva.com about "What is an IVA?" and more.

Find out the meaning of terms related to IVA at our "IVA Glossary" section.

Read special IVA articles at our "IVA Special Articles" section.

Know common myths about IVA at our "Ten Myths About IVAs" section.

Read case studies about "debt solutions" at our "Debt solution case studies" section.

Eligibility for an IVA

  • You will have over £10,000 of unsecured debt
  • Your assets (equity in a house, car) will not be enough for you to clear all debt through selling the asset
  • You will have some available income (certainly over £100/mth) available to pay into the IVA
  • You will live in England, Wales or N Ireland (residents in Scotland will need to consider a Trust Deed instead)

Results of a successful IVA

  • Avoided bankruptcy and its penalties
  • Made debt repayments that are affordable
  • Had interest and charges frozen
  • Had no hassle from creditors requesting payments
  • Had a proportion of your debts written off

Please note that all these benefits naturally depend on you keeping to and completing the affordable repayment terms of your IVA. If you stop making payments into your IVA then your creditors may then petition for your bankruptcy and re-apply interest and charges.

Starting an IVA - How an individual voluntary arrangement is set up

Anyone can consider an IVA to solve their debt problem. IVAs can be set up for anyone regardless of their profession. Your ability to undertake an IVA is not defined by your job but you must be unable to repay your debts.

Read in detail how to start an IVA here: Starting an IVA

IVA process explained

Once you have decided if the IVA is for you, we recommend that you talk to several IVA providers (IVA providers list). Choose one that you feel comfortable with and who has agreed to act on your behalf, you will then have to go through a number of actions with them before your IVA is finally put in place. These actions normally take between 4-6 weeks to complete.

Read details of the action taken in 7 steps here: IVA Process

How do the repayments work?

Once you decide get an IVA, you will work out a repayment plan with the insolvency practitioner.

If the repayment plan is agreed by the creditors, you will strat the paying the set amount monthly, throught out the duration of IVA, ususllay 5 to 6 years.

You will pay the monthly payments to the insolvency practitioner. Money will then be distributed to your creditors as per agreed proportion. Part of your monthly payment may be kept by the insolvency practitioner towards their fees.

What happens at the end of an IVA?

When your IVA has finished, usually five or six years:
  • You don't have to pay your creditors for the debts in the IVA
  • You should receive a 'completion certificate' from your insolvency practitioner.
  • Your IVA record will be taken off from the insolvency register

IVA Questions / FAQs

  • Can anyone enter an IVA?
  • How much does an IVA cost?
  • What happens if I can't make my IVA payments?
  • etc...

Read detailed answers to above IVA questions and many more here: IVA FAQ - Detailed

IVA Advantages and Disadvantages

Read detail with description of each point here: IVA Pros and Cons

# IVA Advantages / Pros IVA Disadvantages / Cons
1 Debt Free in 5 Years Stick to a regimented regime for 5 years
2 Telephone Calls and Payment Demands Stopped £6,000 Minimum Level of Debt
3 Interest and Late Payment Charges Frozen No Unsecured Borrowing During the Arrangement
4 Single Monthly Payment Longer than Bankruptcy
5 Protection for your home Possible Release of Home Equity
6 Protection for certain assets You will pay back more than you will in bankruptcy
7 Repaired Credit Rating Damaged Credit Rating for the duration of IVA
8 Fixed, Legally Binding Agreement You must include all creditors
9 Protection from Court Action Some jobs do not allow the employee to be in an IVA

IVA Terms and Conditions

If you are considering an IVA or are in an IVA, you should make sure you know which terms and conditions apply to you and ensure you keep a copy for future reference.
Insolvency practitioners are within their rights to create their own terms and conditions, but over the years some standard formats have evolved which have been beneficial to the smooth running of the IVA for its duration.

Read full details here: IVA Terms and Conditions and IVA Glossary

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