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What is IVA?

An IVA (Individual Voluntary Arrangement) is a legal process which offers an alternative to bankruptcy to those with unaffordable credit repayments. It allows you to make reduce payments and write off the debt you will not be able to payback within 5 years.

Advantages of IVA

An Individual Voluntary Arrangement (IVA) carries significant Pros, or advantages, for the debtor who is struggling with a serious debt problem.

Finding the debt solution that offers the most suitable way out of debt can be a tricky problem. With most debt solutions there is a downside, an number of disadvantages cause by the solution itself.

However, to balance the downside, there are the Pros, or advantages. These are the reasons why you would choose a particular solution over another.

Here is a list of the main Individual Voluntary Arrangement (IVA) Pros:

  • Affordable Repayments. The monthly repayments are set at an affordable level so you can continue with your life without the burden of your debts.

  • Fixed Term Agreement. The agreement is for a fixed period of no more than 5 years.

  • Debt Write-Off. At the end of the Individual Voluntary Arrangement (IVA), the creditors are obliged to write-off the balance of any unpaid debt.

  • Privacy. The Individual Voluntary Arrangement (IVA) is a private agreement, and unlike bankruptcy it is not published in the press, and also because the Individual Voluntary Arrangement (IVA) is private your employers will not be notified.

  • Professionals. The Individual Voluntary Arrangement (IVA) is available for those debtors whose occupation restricts a bankruptcy solution.

  • Protection. Creditors forfeit the ability to take legal action against you. Creditors also must refrain from contacting you throughout the Individual Voluntary Arrangement (IVA).

  • Binding Agreement. A creditor cannot insist on changes to the Individual Voluntary Arrangement (IVA) repayments.

  • Security. your home is not at risk to the creditors.

  • Permanent Solution. An Individual Voluntary Arrangement (IVA) allows you an alternative to Bankruptcy.

  • Satisfaction. You do not suffer the stigma that surrounds bankruptcy, and you have the knowledge you paid back to the creditors as much as you could afford.

    IVA Process

    • Step 1: You will first review your entire financial situation with a debt advisor from the IVA company that is representing you (click here for some IVA companies ). The debt advisor will work out how much you are able to offer your creditors and whether the IVA is likely to be accepted (to find out if an IVA is the right thing for you, please try our IVA wizard ).  If the debt advisor agrees that the IVA is right for you then they will draft up a statement of affairs to be passed to the Company Insolvency Practioner (IP) that will represent your case to the creditors.
    • Step 2: The IP will then draft a formal written proposal for your creditors. This will normally detail all of your debts and the background to them. You will have to agree and sign this document as being the very best offer that you can make to your creditors. Your signature will have to be witnessed by a solicitor or a commissioner for oaths. The Insolvency Practioner should also explain other options at this point such as bankruptcy (to make sure that the IVA is the right solution and that you have considered all alternatives).
    • Step 3: Your creditors will be circulated with your proposal. They may accept it without modification or request a modification to be made. If a modification is requested then your IP will contact you with the new details (typically it will involve an increase in your monthly contributions to the IVA). Click here to see some typical examples of IVA profiles.
    • Step 4: A creditors meeting is held. This is an opportunity for the creditors to discuss your proposal. Your creditors may not attend the meeting but will offer their acceptance of the proposal in writing. At the meeting as long as 75% of the value of the creditors who have responded to the proposal either in writing or person accept, then the proposal becomes legally binding on all creditors.
    • Step 5: The court and all creditors are formally informed of the result of the meeting and the IP is normally appointed as the supervisor of the Arrangement. S/he will monitor the monthly contributions, supervise the disposal of any assets and fulfil any other requirements of the creditors.
    • Step 6: Maintain your monthly payments into the IVA for the length of time agreed (normally 5 years). You may wish to join our IVA forum to share your experiences with others, the forum also works well as a support environment for those in an IVA.
    • Step 7: Once these and any other terms of your arrangement have been fulfilled, you will be free from your debts, and any outstanding balance will be written off.
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