Understanding Individual Voluntary Arrangement (IVA)
Individual Voluntary Arrangement (IVA) is a formal debt solution available in the UK.
It is a legally binding agreement between an individual and their creditors to repay debts over a fixed period.
Eligibility for IVA
IVAs are suitable for individuals with unmanageable debts and a stable income to make regular payments.
The arrangement is supervised by an insolvency practitioner who negotiates with creditors on behalf of the individual.
Fixed Duration / Affordable Monthly Payments
IVAs typically last for five to six years, during which the individual makes affordable monthly payments.
At the end of the IVA term, any remaining debt is legally written off, providing a fresh start.
IVAs allow individuals to avoid bankruptcy and protect assets from being seized by creditors.
Creditors' Approval: The Key to Starting an IVA
Creditors must agree to the IVA, and once accepted, all parties are bound by its terms.
During the IVA, creditors are prohibited from taking further legal action or adding interest and charges.
Credit Impact
IVAs have implications on credit scores, making it harder to access credit during the term.