Individual Voluntary Arrangement

An Individual Voluntary arrangement-IVA is a formal agreement between you and your creditors where you can come to an arrangement with people you owe money to, to pay a percentage of what you owe. When entering into an IVA you will be able to make reduced payments to your creditors normally for a period of five years at which point your debt is classed as settled. Due to its formal nature, an IVA has to be set up by a licensed professional called an Insolvency Practitioner (IP).

ITS PURPOSE
It is a legally binding agreement between you and the people you owe money to. It is designed to help those in financial difficulties make a formal proposal to settle their debts.

HOW IT WORKS
If it is decided that an IVA is the right option for you, you will be asked questions regarding your income and expenditure .Based on this information a repayment amount will be agreed with you. Once this has been done an application can be made to the court for an Interim Order which will give you legal protection from your creditors during the time it takes to draft your proposal.
For an IVA to be approved creditors will be asked to vote either for or against the proposal. An IVA will only be approved if 75% in monetary value votes in favour.

The IVA will be legally binding .As long as you keep up the repayments, when the term of your agreement is finished, you will be free from these debts regardless of the amount that has been paid off.

During the period of your arrangement your financial situation will be reviewed regularly to monitor any changes in your circumstances.

PAYMENTS
It is your responsibility to make the agreed monthly payment to the IP who will ensure distribution of funds to all creditors on a pro-rata basis. It is in the debtors own interest to keep up payments as failure to do so will almost certainly result in the failure of the arrangement.

Upon successful completion of the IVA the debtor will be considered debt free.