Individual Voluntary Arrangement (IVA)
An IVA is a legally binding contract between you and your creditors and in most cases means that you will be free from unsecured debt within five years. You will pay an agreed, affordable, monthly sum into your IVA, which is based on your income and expenditure. The arrangement is proposed through an Insolvency Practitioner (IP).
Once the proposal has been accepted by the creditors, the funds paid in are distributed by the IP in accordance with the terms of the IVA. At the end of the arrangement, and following successful completion, any outstanding debt owed to the unsecured creditors will be cleared in accordance with the agreement.
Once an individual enters into an IVA, all interest and charges are frozen, and so the cycle of debt is broken.
To qualify for an IVA
 You must have unsecured debts of over £15,000, which you owe to at least three creditors
You or your partner must have a regular source of income from employment; this can include a self employed income
If you are a homeowner, your mortgage payments will be taken into consideration as expenditure costs. The IP might look
at possible equity release at the end of the arrangement, however, you are not at risk of losing your home as long as you
continue to meet your mortgage payments
If your personal circumstances change during your IVA, the IP will act on your behalf and, if appropriate, submit a revised
offer to your creditors for them to consider
In summary:
An IVA is a legally binding agreement with your creditors
It is an agreement to pay back what you can afford, usually over five years
The IP submits a proposal on your behalf to your creditors and arranges a meeting to agree terms
Providing 75% of your creditors in value agree to the terms, the IVA is approved and your creditors will take a
percentage of what is owed to them with the outstanding amount being cleared
Once an IVA is agreed your creditors will freeze all interest and charges.
You only make one monthly, affordable payment
Once you have successfully completed the IVA, the balance of the debt is cleared
85% of all the IVA cases processed by Goodbye2Debt and sent to the IP have been agreed by the creditors
For more information on Individual Voluntary Arrangements, please take a look at our IVA FAQs page.
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