An IVA is a government backed debt solution that acts as an alternative to bankruptcy.
Do you Qualify for an IVA? Take this link to find out if an IVA might help you.
The IVA is a Government backed debt solution for people with serious debt problems.
The IVA was conceived in the mid 1980’s when the then Government realised that UK companies needed a mechanism to help them resolve debt problems, which could act as an alternative to bankruptcy.
As a result the IVA was formed as part of the 1986 Insolvency Act.
Due to the unprecedented increase in unsecured borrowing in the UK over the last 20 years, the IVA Government backed legislation, initially designed to help the commercial sector, has recently been adopted by the personal debt sector too.
As more and more people have been struggling with personal debts IVAs, or Individual Voluntary Arrangements, have been adapted to help individuals reach new agreements with their creditors whilst allowing them to avoid declaring themselves bankrupt.
The sudden increase in this type of IVA usage caused some friction in the market place, with some creditors putting in place hurdle rates, or qualifications, which they insisted must be met before they would consider the proposed IVA.
And with the increasing popularity of the IVA, Government found itself getting dragged in to an argument between creditors and IVA providers, otherwise known as Insolvency Practitioners.
The Government found itself being asked to mediate between creditors and Insolvency Practitioners as a result of the growing numbers of IVA applications.
The government, however, was reluctant to get directly involved and wanted to avoid making changes to the Insolvency Act, instead it suggested that the two sides try to resolve the problem amicably.
To this end there now exists harmony between both camps, after the introduction of the IVA protocol.
IVA providers and creditors have agreed on a method of simplifying and streamlining the IVA process, which in turn has reduced the IVA’s cost to creditors.
The Government backed IVA is again offering debt help to thousands of people every month.
Click here to find out more about IVAs, or call 0800 088 7503 now.
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