What is an IVA?

What is an IVA? It's an agreement with creditors to repay some of your debt on revised terms over a period of up to 60 months. IVA helps is ideal for people with serious debt problems and represents the main alternative to bankruptcy in the UK. You will enjoy full court protection from creditors for the duration of the agreement.

How to reduce your debt with an IVA

Statement of affairs
You will work with an insolvency practitioner to produce a legally binding document. It is necessary to write a personal statement that states how you got into debt, verifies that the information is 100% accurate and swears to it in the company of a solicitor. Your proposal will be put to a vote at a meeting of creditors. Protecting your home
Though you are expected to raise money from the equity in your property at the end of year four, you are able to stay in your family home. Unless you are in negative equity, this wouldn't be the case if you went bankrupt. Career
You may also be able to keep your job, whereas you'd have to resign from a financial, legal or insurance-related career. Avoiding bankruptcy
IVA debt help will be provided if 75% of your creditors, in terms of value, vote in favour of the Individual Voluntary Agreement. Provided that it's given the go ahead, your IVA will be binding on all of your creditors. If your creditors don't agree, you'll need to identify an alternative, such as a debt management plan or bankruptcy. IVA information on repayments
Individual Voluntary Arrangements have the potential to reduce your debt by up to 75%. You should get IVA advice prior to signing-up because there are other debt solutions and this may not be right for your circumstances. However, it provides a way to become free from debt in only 60 months. You may even be able to reach a full-and-final settlement with creditors.

IVA advice when your personal circumstances change

IVA variation meeting
If your personal circumstances change or you fall behind with the payments, you can put a variation to a vote of creditors. You may be able to add the missed payments to the end of the agreement if 75% of creditors vote in favour of this motion. You can get advice from your Insolvency Practitioner or get help on a debt forum. Declare yourself bankrupt
Sixty months is a long time to commit to a repayment plan and a lot can happen in that time frame. If you're unable to afford to continue with the repayments, your Insolvency Practitioner will use your earlier monthly contributions to declare you bankrupt. You should also discuss the possibility of entering a debt management plan.