IVA stands for Individual Voluntary Arrangement.
An Individual Voluntary Arrangement, or IVA, is a formal debt solution which is designed to assist a person who is struggling with unaffordable personal repayments.
The IVA does this by restructuring the expected repayments to a new affordable monthly payment, thus helping the debtor to keep up to date with the priority expenses, such as secured loans - like a mortgage or rent payment, and essential living cost - without the fear of legal recovery action being taken against them by their unsecured creditors.
Because the IVA is a formal arrangement, it protects both parties from trying to make adjustments to the arrangement after it has been agreed.
An IVA will also stop a debtor being harassed by their creditors. This is because one of the fundamental terms of the IVA stops creditors from contacting the debtor directly, once the IVA has begun, and all correspondence must be through an insolvency practitioner. The insolvency practitioner is chosen by the debtor to assist with the IVA proposal, and the insolvency practitioner oversees or supervises the IVA for its full term.
An IVA will under normal conditions last for a term of 5 years, after which time the debtor will be considered debt free, even if they have not been able to repay the full original level of debt.
An IVA is especially suitable when the debtor has a property they need to protect from their unsecured creditors. This is because once the IVA has been agreed, and so long as the debtor adheres to the IVA terms, the unsecured creditors are unable to force the sale of the property, instead they settle for as much equity as can be released via a standard re-mortgage.
The IVA is also extremely suitable as a debt solution when the debtor has an occupation which would be put at risk should the debtor be made bankrupt. Professional occupations such as accountants or legal professionals, or indeed an occupation where there is deemed to be a high level of responsibility or trust such as a Police Officer, someone in the armed services or a bank employee, all find themselves protected by an IVA, and it is a real alternative debt solution to bankruptcy.
An IVA is also a private arrangement between the debtor and the creditors, and although it will appear on the IVA register, it is not made public which is not the case in bankruptcy.
If you would like further information about the suitability of an IVA to assist you with your personal circumstances then call…
0800 088 7503
and have a chat with one of our IVA specialist advisers. Alternatively, you could enter your details into our quick contact form and we’ll call you at your convenience.
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