Individual Voluntary Arrangements (IVA) explained
An IVA is a legal contract between a client and their creditors. It is a legally binding agreement supervised by a Licensed Insolvency Practitioner, to help reach a compromise with creditors and avoid bankruptcy.
The IVA enables a client to reduce their debts to an affordable level and clear them over a fixed period. The compromise should offer a larger repayment towards the debt than could otherwise be expected if the client was made bankrupt.
The client makes one single, manageable monthly payment based on their budget, normally for a period of 5 years. After that the remaining debt is wiped clean, leaving the client completely debt-free. This means that an IVA can help to write off up to 75% of debts.
Under the terms of the agreement the client undertakes to contribute as much as possible within their budget.