what is an IVA
What is an IVA?
An IVA is an Individual Voluntary Arrangement. Individual Voluntary Arrangements were introduced by the government in 1986 as part of The Insolvency Act. An IVA enables you (the debtor) to make a proposal to the people (the creditors) that you owe money to and come to a settlement. The proposal will need to be accepted by the majority of your creditors for an IVA to be approved. An approved IVA will then stand as a contract that binds all parties and will prevent any further action against you, the creditors that didn’t accept the proposed IVA will also be forced to enter the IVA if the majority have approved.
What do you need to do?
You will be required to make a monthly payment over a 60 month period and after that whatever debt is left will be totally cleared, leaving you 100% debt free. An IVA is available for individuals, sole traders and partners who are struggling with their debts. An IVA is particularly used by individuals who own their own property and want to avoid the possibility of losing it through bankruptcy, an IVA is also usually the choice of individuals whose employment is of a professional status that would be affected otherwise through bankruptcy.
An IVA is a legally binding contract between you and your creditors and due to its formal nature it is supervised by an insolvency practitioner. IVAs allow you to offer a larger repayment towards your debts than would be expected if you were to be made bankrupt.