IVA Individual Voluntary Arrangement

An IVA “Individual Voluntary Arrangement” is a legally binding agreement between you and your creditor. It allows an individual in financial difficulty to make a formal proposal to settle their debt within a reasonable and fixed period of time (normally 5 years). Any interest and debt charges will be frozen and creditors will be prohibited from demanding additional payments. An IVA involves making monthly payments based on an affordable disposable income. Once the final payment is made, any outstanding debt is legally written off. As thus the aarrangement can write off up to 95% of your debts (subject to your circumstances).

Pros with an IVA

• There isn't the stigma or publicity that comes with bankruptcy.
  
• The debtor, via the insolvency practitioner, is involved in the choice of assets made available to the creditors since the arrangement is designed to suit the debtor's situation. All this is providing the creditors are no worse off than if bankruptcy had taken place.
• Creditors who vote against the IVA are by it as long as 75% of the creditors agree to it.
• A debtor can still be a company director, in the armed forces, hold public office, retain their professional status or trade under a business name.
• The debtor is able to operate a normal current account, as long as it does not have an overdraft facility.
• Creditors can still claim tax relief against bad debts just as with bankruptcy

Cons

• Usually only suitable if the debtor has unsecured debts of at least £15,000
• Creditors representing at least 75% of the value of the debt, as well as a simple majority, must agree to the proposed arrangement for the IVA to be approved.
• IVAs usually last for five years
• The home and assets of the debtor can still be at risk if the creditors decide not to exclude them.
• If the IVA fails, the debtor can still be made bankrupt.
• All IVAs are recorded in a public register and will almost automatically appear on your credit file.

IVA Guides: IVA Guides
IVA Guides: Why IVA?
IVA Guides: Starting an IVA
IVA Guides: Pros and Cons IVA
IVA Guides: FAQ
IVA Guides: Expert Advice
IVA Guides: Health Issues
IVA Guides: IVA News Articles
IVA Guides: IVA Testimonials

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