Individual Voluntary Arrangement (IVA)
(not available in Scotland)
Description
An IVA is arrangement with your creditors. It's entered into with the assistance of an Insolvency Practitioner, who will work to secure the agreement of your creditors to a payment proposal.
Eligibility
Typically carrying consumer debts of £15,000 or more, you will be struggling to meet current repayments to your creditors. You may be able to pay a certain reduced amount per month towards your debt, or you may be able to release a lump sum through remortgaging your home or sale of another asset.
If you are resident in Scotland you may be eligible for a Trust Deed.
Advantages
- Takes the pressure off
- One affordable payment per month to your creditors
- Fixed repayment period (normally 60 months or less)
- Any remaining debt could be written of at the end of the fixed period
- Creditors freeze future interest and charges
- Less stigma and publicity than normally caused by bankruptcy
- You are involved in the choice of assets made available to creditors
Disadvantages
- Usually only suitable if you have £15,000 of unsecured debt or more
- During the IVA active period you will be unable to borrow further funds without the permission of the arrangements supervisor
- The IVA may appear on your credit file and affect your future credit rating
- Should the IVA fail, you may still be made bankrupt
- 75%, in value, of your creditors who vote (on the proposal) must agree to your proposed arrangement