IVA stands for Individual Voluntary Agreement. It is a formal agreement with your creditors which allows you to pay back just a percentage of your debt. With an IVA as much as 75% of your debt can be written off. IVA was introduced as a part of the Insolvency Act of 1986 and necessitates a debt of at least ?15,000 owed to three or more creditors. You only have to deal with one affordable monthly payment or in some cases a lump sum. Since an IVA is legally binding your creditors cannot change the IVA terms and conditions once they have agreed to it. Also they cannot threaten any legal action against you as long as you maintain your monthly repayments. An Insolvency Practitioner helps to formulate your IVA.



The IVA Process:

Why should you choose an IVA over Bankruptcy?

The IVA Advantage:

Does that mean that an IVA has no disadvantages? Not necessarily. An IVA might require you to release some or all the equity that you have tied up in your property. Also you qualify for an IVA only if your total unsecured debt is more than ?15,000 and if you can afford a monthly payment of ?200. When you have availed an IVA you will not be able to use any of your credit cards or store cards. You will not be allowed to borrow any more money until you have cleared your debt.

IVA is becoming an increasingly popular option when compared to debt management program or bankruptcy. Various debt solutions might reduce your repayments to a great extent but they leave you with a large part of your debt to pay back. These debt solutions are not legally binding either. When compared to the various debt solutions an IVA is an ideal solution for both the debtor and the creditor.