Individual Voluntary Arrangement (IVA)
(not available in Scotland)
What Is It?
An IVA is a formal arrangement with your creditors. It's entered into with the assistance of an Insolvency Practitioner, who will work to secure the agreement of your creditors to a payment proposal.
Do I Qualify?
You qualify for an IVA if you are:
- Typically carrying consumer debts of £15,000 or more
- You are 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.
If you are resident in Scotland you may be eligible for a Trust Deed.
Advantages
- Takes the pressure off
- One affordable payment per month to your creditors
- Fixed repayment period (normally 60 months or less)
- Any remaining debt could be written of at the end of the fixed period
- Creditors freeze future interest and charges
- Less stigma and publicity than normally caused by bankruptcy
- You are involved in the choice of assets made available to creditors
Disadvantages
- Usually only suitable if you have £15,000 of unsecured debt or more
- During the IVA active period you will be unable to borrow further funds without the permission of the arrangements supervisor
- The IVA may appear on your credit file and affect your future credit rating
- Should the IVA fail, you may still be made bankrupt
- 75%, in value, of your creditors who vote (on the proposal) must agree to your proposed arrangement