Individual Voluntary Agreements
An Individual Voluntary Arrangement (IVA) avoids the stigma of bankruptcy and is a powerful tool in dealing with personal debts. It is an ideal solution for people who really want to repay their debts but cannot afford the ongoing contractual payments.
What is it?
An Individual Voluntary Arrangement (IVA) is an agreement between you and your creditors whereby you make funds available for distribution between the creditors bound by the agreement. This usually involves making monthly payments out of your income for a set period of time (usually five years) and if you have any assets such as equity in your property, endowment policies etc you may have to make some of these available to creditors as well. An IVA is always tailored to suit your own specific circumstances.
Can I apply for an IVA?
If you are unable to pay your debts on a monthly basis you may apply for an IVA. This can also apply even if you have assets that, if sold, would cover your debts. If you are already subject to a Bankruptcy Order you may still apply for an Individual Voluntary Arrangement, and if the arrangement is subsequently approved, your Bankruptcy can then be annulled.
Do you have equity in a property?
For homeowners in debt, releasing equity from a property to offer creditors in full and final settlement of all debts are now an increasingly common option. Our experiences indicate that creditors will usually accept sums which provide a minimum 25% return, meaning that you could legally write off up to 75% of your debts using the IVA option, depending upon individual circumstances.
What are the Benefits?
- Interest and charges on your debt are frozen legally
- Creditors stop ringing and writing to you - they contact the supervisor of the IVA instead
- An IVA gives you protection from the ongoing action by the court creditors
- Once your obligations under the IVA are fulfilled the balance of your debts are legally written off
- You avoid bankruptcy
- Your credit rating is not as seriously affected as in bankruptcy
- You can continue to trade
What are the alternatives?
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