What is An IVA?

Individual Voluntary Arrangements, or IVAs were first introduced by the government under the Insolvency Act 1986 as an alternative to bankruptcy.
An Individual Voluntary Arrangement (IVA) is a formal insolvency procedure. It is an agreement made between you and your creditors whereby you and your creditors come to an arrangement that you will make affordable monthly payments from your income and/or utilise your other assets in order to pay off a percentage of the total amount of your debt. As a general rule an IVA lasts 5 years and, provided you meet your obligations under the agreement, at the end of the 5 years your debt is classed as settled.
The IVA is an extremely powerful tool enabling you to put forward a deal to your creditors by way of a proposal which, if approved by the required majority of your creditors, becomes legally binding. However, due to the formal nature of this process, you will need the assistance of a licensed professional, an Insolvency Practitioner, to help you set up your IVA. At the Debt Helpline, we do not charge you any upfront fees for providing this assistance with your proposal for an Individual Voluntary Arrangement.
While an IVA is much simpler and more flexible than bankruptcy proceedings, you should not look at it as an easy option. While it offers you some great advantages (namely protection from further creditor action and more manageable monthly payments), you are signing up to a legally binding contract for the privilege. In some cases, bankruptcy may be a more suitable option.