INDIVIDUAL VOLUNTARY ARRANGEMENT (IVA)

  • Write-off unaffordable debt
  • Freeze all interest and charges
  • One monthly affordable payment
  • Legally stop all creditor harassment
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What is an IVA?

An Individual Voluntary Arrangement (IVA) is a formal agreement which allows you to make reduced payments to your creditors, usually over five or six years. At the end of your IVA any unsecured debt that has been included in the arrangement is written off. There is no limit to the amount of debt that can be included in IVA and most unsecured debts can be included. An IVA is only available in England and Wales. When you enter into an IVA a proposal will be put to your creditors and if 75% of them (by debt value) agree to the proposal, then the IVA will be put into place.

Consideration of IVA

  • An IVA can affect your credit rating and will be registered on your credit file for 6 years
  • Details of an IVA are registered on the Insolvency Register which is a public register
  • Homeowners may need to release equity from the value of their homes to pay off debts, and that a remortgage may attract higher interest rates or, if no remortgage is available, an individual voluntary arrangement may be extended for 12 months
  • If the IVA fails there is a risk of bankruptcy
  • There are restrictions placed on the expenditure of a person who enters into an IVA

    • Benefits of IVA

    • You make one monthly payment usually for a period of 5 years
    • Interest and charges are frozen if the IVA is accepted
    • If you are a homeowner, you can keep your home providing that you maintain payment towards your mortgage and secured loans
    • There are no set up fees with an IVA. Any fees charged by the Insolvency Practitioner are usually included within your monthly payment
    • An IVA is legally binding on your creditors and if accepted your creditors cannot take further action against you or contact you, other than to send annual statements