Bookmark and Share

IVA - Individual Voluntary Arrangement(Not available in Scotland)

Description

An Individual Voluntary Arrangement(IVA) is an arrangement with your creditors via an Insolvency Practitioner(IP) who will work to secure the agreement of your creditors to a payment proposal.

Eligibility

Typically carrying consumer debts of £15,000 or more, you will be struggling to meet current repayments to your creditors. You may be able to pay a certain reduced amount per month towards your debt, or you may be able to release a lump sum through remortgaging your home or sale of another asset.

Advantages

  1. Takes the pressure off.
  2. One affordable payment per month to your creditors.
  3. Up to 75% of your debt may be written off.
  4. Fixed repayment period (normally 60 months or less)
  5. Creditors freeze future interest and charges.
  6. Less stigma and publicity than normally caused by bankruptcy.
  7. You are involved in the choice of assets made available to creditors.

Disadvantages

  1. Usually only suitable if you have £15,000 of unsecured debt or more.
  2. During the IVA active period you will be unable to borrow further funds without the permission of the arrangements supervisor.
  3. The IVA may appear on your credit file and affect your future credit rating. Should the IVA fail, you may still be made bankrupt.
  4. 75% of your creditors who vote on the proposal must agree to your proposed arrangement.