IVA Agreement

An IVA offers someone with a serious debt problem the opportunity to reach a new repayment agreement with their creditors and acts an alternative to bankruptcy.

An IVA restructures the applicant's monthly repayments by establishing a single repayment based on affordability.

An IVA has a predetermined term of, usually, 5 years after which any unpaid debts are legally written off and the applicant is considered debt free.

Legally Binding Agreement

The structure detailing the agreement on offer to creditors is outlined in the IVA proposal. The proposal details the personal circumstances of the applicant and lays out their proposal to creditors.

Creditors are summonsed to a Creditors' Meeting and invited to vote on whether they accept the offer being made.

For the IVA to be accepted, 75% of the creditors (in debt value terms) must vote to accept the proposal before them. Once accepted, the agreement becomes legally binding on all parties and even those that voted against the agreement are legally bound by its terms.

IVAs were introduced into UK law as part of the Insolvency Act 1986 and since their introduction they've enabled hundreds of thousands of UK residents to avoid the bankruptcy process.

Qualifying for an IVA

Not everyone that wants to apply for an IVA will be able to do so, as creditors restrict the numbers of applications by imposing qualifying criteria.

People with debt levels below £10,000 will often be told they don't qualify for an IVA. In truth there isn't a legally established baseline, but in practical terms an IVA tends to be less favourable to creditors with debt levels below £10,000 and are often rejected.

Guidelines suggest that there should be multiple debts owed to more than one creditor before an IVA should be proposed but, yet again, exception can be made when there is just a single creditor if there are mitigating circumstances, or if the proposal represents a generous return.

Click here for more information on whether you qualify for an IVA or, alternatively, try out our IVA calculator and receive a detailed debt report highlighting the options available to you.

Professional IVA Advice

If you'd like further information on any aspect of the IVA subject, visit our IVA library.

My IVA Adviser are IVA specialists and have been helping people enter IVA agreements for the past decade. If you would like to take advantage of our 'no obligation' IVA consultation service, please call 0800 088 7503 or, alternatively, complete this form and one of the team will call you back at your preferred time.

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