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What is an IVA?

An IVA is a legal process, which allows a person struggling with debt the chance to make a formal proposal to their creditors in order to get out of debt.  The purpose of an IVA proposal is to prove to creditors that it would be of greater benefit to themselves and the debtor, in comparison to the debtor being made bankrupt.  A creditors meeting is held and if the proposals being made are accepted by the 75% of creditors then they become legally binding on all creditors informed of the proposal. Once accepted, creditors have no alternative but to stop any future interest and charges accruing on the outstanding debts.

On successful completion of the IVA the debtor will be considered debt free. Any outstanding balances are written off (known as a composition of debts) and the debtor is then free to start with a clear debt record.

Who can enter an IVA?

anyone whose debts surpass £5,000.

Will I lose my house?

No. If there is equity in the property then it may be requested that you should re-mortgage to use some of the money to pay towards your debts.

Can I stay in Business?

Yes you can continue trading.

Will it affect my job?

Most jobs will not be affected but if you are in the financial services sector or are worried that an IVA will affect your position you should check the terms and conditions of your employment.

Will it become public?

No an IVA is a private matter between you and your creditors.

How long does an IVA last?

An IVA usually lasts 5 years

Can all my creditors be included in the IVA?

All unsecured debts can be considered. You cannot include secured loans against your property.

Can I still opt for an IVA if a bankruptcy Order has been made against me?

It is cheaper for you to set up an individual voluntary arrangement before you become bankrupt but you can still propose one afterwards.

What happens if I cant maintain payments on the IVA?

During your arrangement it is important that you endeavour to make every payment as set down in the terms. However, if you need to miss a payment for any reason, this may be agreed with your IP. However, creditors often stipulate that no more than one or two payments can be missed during any 12 month period. There is also the possibility of being declared bankrupt if you keep missing payments.

What happens once I finish paying my IVA?

Once you have made your final payment (as specified in the terms of your agreement), you will be cleared of all debts included within the arrangement. Any outstanding balances of these debts will be written off and you will be free of these debts.

Can I enter an IVA if I am a homeowner?

Anyone can undertake an IVA as long as they are able to stick to its terms.

Do I have to tell anyone?


Will an IVA cover all my debts?

An IVA will cover all your unsecured debts. An IVA will not cover student loans.

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