IVA:

Individual Voluntary Arrangement. An Individual Voluntary Arrangement, called an IVA, is a formal agreement between you and your creditors enabling you to come to an arrangement with them to pay off a percentage of your total debt, by making regular agreed reduced payments.

This arrangement will usually result in your debt being cleared after five years. An Individual Voluntary Arrangement is quite different from a Debt Management Plan, which is not legally binding and it is important that consumers recognise this distinction. Your IVA has to be set up by a licensed professional called an Insolvency Practitioner (IP) and a proposal has to be prepared by a licensed IP who then presents it to creditors at a creditors’ meeting.

In contrast to informal debt solutions an IVA provides a true “light at the end of the tunnel” giving you peace of mind and fresh hope as you have an agreement with your creditors to make a single reduced monthly payment. It lasts for a reasonable period of time (normally five years).

Once it has been agreed, creditors are prohibited by law to add further interest or charges to your accounts. This is a fixed agreement and so creditors cannot arbitrarily demand changes to it. The purpose of an IVA is to help those in financial difficulties to come to a practical arrangement with their creditors, so that they are able to make a formal proposal to settle their debt by drawing up a legally binding document. If you would like more information you can contact the IVA Helpline click here.