What is an IVA - Individual Voluntary Arrangement?

An IVA (Individual Voluntary Arrangement) is a formal agreement between you and your creditors where you will come to an arrangement with people you owe money to, to make reduced payments towards the total amount of your debt.

It is a legally binding agreement between you and your creditors (people you owe money to). It helps those in financial difficulties to make a formal proposal to settle their debt.

Monthly payments are based on an affordable disposable income. Once the final payment is made, any outstanding debt is legally written off. The arrangement can write off up to 65% of your debts (subject to your circumstances).

IVA's are legally binding. As long as you keep up the repayments, when the term of your agreement is finished, you will be free from these debts regardless of how much has been paid off. During the period of your arrangement your financial situation will be reviewed regularly to see if there has been any change in your circumstances.

It is very important not to confuse an IVA with a Debt Management Plan. These are not legally binding. Most IVA cases are based around one, affordable, monthly, payment, over a period of 60 months. This one affordable payment is based on your earnings minus your expenses.

Individual Voluntary Arrangement (IVA)