For most people, an individual voluntary arrangement is the alternative to filing bankruptcy. For countless individuals bankruptcy is just not an option, due to whatever reasons such as their job won’t allow it. An individual voluntary arrangement or IVA is an agreement reached by the debtor and his creditors to repay a percentage of their debt over a short period of time. Normal terms are about 3 to 5 years in length. No bankruptcy is on your credit and you pull yourself out of debt in a short amount of time.

For an individual to get started with the IVA process, one must attain an insolvency practitioner, or IP. This person must legally be able to write an IVA and are usually an accountant. Once an IP agrees to create an IVA, they can then apply for an “interim order" from the county court. This stops creditors from starting bankruptcy procedures against the individual. From here an IVA is written between the debtor and the IP. This is sent to all the creditors and they are given a 14 day notice to either attend a “creditors meeting" or agree or disagree with the terms of the IVA. A 75% approval from all the creditors is required for the IVA to take affect. If the IVA is approved, the IP supervises the debtor while paying all the monthly installments.

While a number of IVA’s are approved an agreed upon, for those that aren’t, the individual starts back in the same position they were in before the interim order was given. The debtor must then work out an agreement with their creditors individually. One must wait 12 months before another interim order maybe requested. So carefully look over all of your options before you decide an IVA is the best solution for you.