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 IVA 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 arrangement.
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, owed to at least three creditors
- You or your partner must have a regular source of income from employment
- If you are a homeowner, your mortgage payments will be taken into consideration as expenditure costs
- 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
If you do not qualify for an IVA then there are IVA alternatives which could still help.
Call our specialist debt team on 08000 915 004 to find out how we could help you.