An Individual Voluntary Arrangement (IVA) is a legally binding
agreement between you and your creditors, whereby you pay
an agreed and affordable sum of money each month, usually
for 3 to 5 years, and the total paid is then divided up between
your creditors, who accept this sum in full and final settlement.
It protects you against any further action from people who
are chasing you for money, and enables you to become genuinely
debt-free.
IVAs were first introduced in 1986 as part
of government legislation in order to provide people in financial
difficulty with a second chance. Before this, the formal choices
available to individuals were fairly limited, with the only
real alternative being to declare yourself bankrupt. The new
legislation established IVAs, which are formally recognised
but without the trauma of bankruptcy.
Today IVAs are regarded as a truly positive
way out of debt, and depending on your circumstances creditors
can agree to write off as much as 50% of your debt and charge
no further interest, or even up to 75% in certain situations.
Although other debt solutions exist, none can offer the flexibility,
affordability and protection from creditors that an IVA provides.
IVAs can only be administered
by licensed insolvency practitioners such as those with EmployeeDebtline,
but are available to all residents of England, Wales and Northern
Ireland. The equivalent for residents of Scotland are Protected
Trust Deeds (PTDs).
Advantages
¤
stops your creditors taking
legal action or chasing you for money
¤
avoids having to sell your
home
¤
all interest and charges
are frozen
¤
you make only one affordable
monthly payment, based on your ability to pay
¤
your creditors can agree
to write off up to 50% of your debt, or even 75%
in certain situations
¤
your debts are completely
written off once finished, giving you a fresh start
¤
avoids the trauma of bankruptcy
¤
keeps your details out
of the local newspapers
¤
does not affect your ability
to hold certain jobs or act as a company director
Disadvantages
¤
at least 75% of your creditors who vote must approve
the arrangement
¤
your ability to borrow
money afterwards may be affected, typically for
up to one year
¤
if you stop your monthly
payments, bankruptcy
proceedings may be taken
If you think an IVA might be right for you, or would simply
like to discuss the options available, then contact
us now for immediate help. Our friendly team of experts
will listen to your individual circumstances and provide you
with clear, honest and impartial advice. We are always happy
to help.
