An Individual Voluntary Arrangement is a legally binding arrangement between you and your creditors, which allows you to pay less than what you actually owe to your debtors. It can be seen as an alternative to bankruptcy, but you can opt for an IVA even if you are already bankrupt.


The term Individual Voluntary Arrangement was first established under the Insolvency Act of 1986. The process involves the hiring of a Licensed Insolvency Practitioner who helps you reach a compromise with your creditors about the amount you will be paying them in the future. After careful analysis, a proposal is presented to all the creditors, specifying exactly what you can afford to pay monthly, and also the time period. The amount put forward to the debtors is based on your financial position and ability to make those payments regularly. Although there are many IVA specialists practicing in the UK, it is important to hire a reliable person who you can trust.
 
Besides preventing creditors from bankruptcy, an IVA is a good choice for them too since it generally guarantees them higher amounts than other choices. It is significant to propose the creditors a good deal than they would get from bankruptcy; or else, they may refuse the proposal. To finalize the agreement, 75% of the creditors must see eye to eye to it.
 
An IVA could prove to be an ideal way to get out of debt for someone since it provides a number of benefits. It lessens their debts to a certain level that they can manage to repay; hence, they can carry on with the life with no intimidation of a legal action against them. Moreover, it allows them to get free from debts within three to five years of time period, by giving a fixed amount of instalment every month.
 
The creditors are not allowed to increase this amount nor can they increase the rate of interest on your debt. Another good thing is that you would not have to communicate with the creditors yourself because your practitioner will be there to do this for you. Therefore, it provides a simple and a hassle free way of your debt repayment.
 
Another good thing about an IVA is that it assists you in maintaining your space to yourself and integrity; in the mean while you disburse your debt; whereas, in case of a bankruptcy filing, the case has to be disclosed and announced publically. So, you would not need to disappear from your work place or face awkwardness. Not just that, but an IVA does not provide the debtors control of your belongings or possessions. Consequently, you would not have to surrender possession of your house or dread legal action.
 
Thus, for those of us in financial trouble, an IVA offers a good alternative to bankruptcy. When the term of the IVA is completed, the remaining debt is written off and the debtor is debt free. However, if you default on your payments, a legal action can be taken against you.
 
Before opting for an IVA, ensure that the plan you have selected suits your financial position, so that you can easily make the payments. It is a big commitment, which should be entered into carefully.An Individual Voluntary Arrangement is a legally binding arrangement between you and your creditors, which allows you to pay less than what you actually owe to your debtors. It can be seen as an alternative to bankruptcy, but you can opt for an IVA even if you are already bankrupt.
 
The term Individual Voluntary Arrangement was first established under the Insolvency Act of 1986. The process involves the hiring of a Licensed Insolvency Practitioner who helps you reach a compromise with your creditors about the amount you will be paying them in the future. After careful analysis, a proposal is presented to all the creditors, specifying exactly what you can afford to pay monthly, and also the time period. The amount put forward to the debtors is based on your financial position and ability to make those payments regularly. Although there are many IVA specialists practicing in the UK, it is important to hire a reliable person who you can trust.
 
Besides preventing creditors from bankruptcy, an IVA is a good choice for them too since it generally guarantees them higher amounts than other choices. It is significant to propose the creditors a good deal than they would get from bankruptcy; or else, they may refuse the proposal. To finalize the agreement, 75% of the creditors must see eye to eye to it.
 
An IVA could prove to be an ideal way to get out of debt for someone since it provides a number of benefits. It lessens their debts to a certain level that they can manage to repay; hence, they can carry on with the life with no intimidation of a legal action against them. Moreover, it allows them to get free from debts within three to five years of time period, by giving a fixed amount of instalment every month.
 
The creditors are not allowed to increase this amount nor can they increase the rate of interest on your debt. Another good thing is that you would not have to communicate with the creditors yourself because your practitioner will be there to do this for you. Therefore, it provides a simple and a hassle free way of your debt repayment.
 
Another good thing about an IVA is that it assists you in maintaining your space to yourself and integrity; in the mean while you disburse your debt; whereas, in case of a bankruptcy filing, the case has to be disclosed and announced publically. So, you would not need to disappear from your work place or face awkwardness. Not just that, but an IVA does not provide the debtors control of your belongings or possessions. Consequently, you would not have to surrender possession of your house or dread legal action.
 
Thus, for those of us in financial trouble, an IVA offers a good alternative to bankruptcy. When the term of the IVA is completed, the remaining debt is written off and the debtor is debt free. However, if you default on your payments, a legal action can be taken against you.
 

Before opting for an IVA, ensure that the plan you have selected suits your financial position, so that you can easily make the payments. It is a big commitment, which should be entered into carefully.