IVA: Individual Voluntary Arrangement

What Is an IVA

The IVA (Individual Voluntary Arrangement) was introduced by The Insolvency Act of 1986 as an alternative to bankruptcy which benefits both the debtor and the creditor. An IVA enables people facing financial difficulties to come to a formal agreement with their creditors rather than having to face bankruptcy.

The IVA represents an exciting new opportunity to those facing serious debt to both avoid bankruptcy and to make a fresh start. In this article, we'll answer the most frequently asked questions about the IVA.

What Are the Advantages of an IVA

  • With an IVA you only pay back an agreed percentage of your debts
  • While an IVA is in place, it is illegal for your creditors to harass you
  • With an IVA, interest on your loan is frozen which means that your debt won't keep growing
  • An IVA doesn't affect your professional status or ability to hold public office like bankruptcy does

What Are the Disadvantages of an IVA

  • If you don't stick to the terms of your IVA then the insolvency practitioner or your creditors can make you bankrupt.
  • If your circumstances alter which means you can no longer afford the payments, your IVA may end if the insolvency practitioner is unable to convince your creditors to accept a new agreement.

How Do I Set Up an IVA

  • With the help of an insolvency practitioner, you outline a debt repayment proposal which clearly demonstrates how it benefits your creditors and which shows what funds and assets are available for them.
  • Then you apply to the court for an interim order. If this order is granted then the creditor cannot petition for bankruptcy.
  • The creditors then meet to decide whether or not to accept your proposals.
  • If the creditors approve your proposals, they are binding on everyone who had notice of the meeting. If this happens, the insolvency practitioner takes charge of the assets which are administered for the creditors in line with the proposals.

    Recommended IVA Body:

    Clear Start is an independent free IVA helpline offering IVA help and advice to anyone in the UK.

    To contact an IVA adviser click here: IVA ADVICE or telephone freephone 0800 138 5445.

    Who Might Benefit From an IVA

    An IVA can help anyone experiencing debt problems- particularly those who own property which they would risk losing if they were to be made bankrupt.

    An IVA might be a good idea for you if you if:

    • You owe money to people or companies that wouldn't agree to an informal debt management arrangement
    • You've already tried an informal arrangement, but it's failed.

      Can I Get an IVA After I've Been Made Bankrupt

      The Enterprise Act of 2004 introduced new rules on how to get an IVA after you are made bankrupt.

      This involves applying for what's called a Fast Track IVA by presenting a proposal to the Official Receiver.

      If The Official Receiver thinks that your creditors would do better to accept an IVA rather make you bankrupt, he/she might agree to act as supervisor of the IVA. If the IVA is agreed by your creditors, your bankruptcy order will be annulled by the Official Receiver.

      Where Will My IVA Details Be Stored

      The record of your IVA is kept on a public register and anyone can search to see if someone has an IVA. Records of your IVA are also held credit reference agency files for up to six years.

      Details of your IVA will stay on the public register until it is completed. You can search the register by using the contact details below.

      The Individual Insolvency Register
      The Insolvency Service
      5th Floor, West Wing
      45-46 Stephenson Street
      Birmingham
      B2 4UP
      Tel: 0121 698 4000
      Fax: 0121 698 4406

      Mike Curry runs a free IVA and consumer debt helpline offering impartial advice to those suffering from serious debt.

      In The News:

    • pen paper and inkwell


    cat break through


    Benefits and Drawbacks of Bankruptcy

    Outlined below are some of the benefits and drawbacks of... Read More

    New Bankruptcy Legislation May Make it Harder to Find an Attorney

    The recently passed Bankruptcy Abuse prevention and Consumer Protection Act... Read More

    Dont Drown Your Debts, Manage Them!

    Are you among the millions of people who have found... Read More

    Eliminating Credit Card Debt

    The overwhelming task of eliminating your debts can often seem... Read More

    Bankruptcy - Is It The Right Choice For You?

    Bankruptcy is one of the tougher choices we as adults... Read More

    Credit Card Debt & the Unfairness of the Universal Default Clause

    Let's look at a real world example: A woman purchased... Read More

    Bad Credit Home Loan To Get You Out Of Debt

    A "bad credit home loan" can help you climb your... Read More

    Personal Bankruptcy: Last Option To Legally Stop Bill Collectors

    Do you have stacks of unpaid bills?Are you in debt?Are... Read More

    Selecting A Credit Counselor; Asking The Right Questions.

    When you find yourself thinking about using a credit counseling... Read More

    The First Step To Getting Out Of Debt: Make The Commitment!

    These days, getting into debt is easy.Unfortunately, getting out of... Read More

    Is It Possible to Be Sued For My Debts?

    It is possible for creditors and third-party collection agencies to... Read More

    Bankruptcy - The New Scarlet Letter

    Nathaniel Hawthorne's book The Scarlet Letter states in Chapter 2,... Read More

    Debt

    We all know about debt. If you don't have too... Read More

    Debt Relief with this Simple Formula

    Is there a way to get out of debt without... Read More

    Repair Bad Credit Yourself

    In March 2005, the U.S. financial services industry succeeded in... Read More

    Debt and Your Dreams

    You may not realize what that credit card bill is... Read More

    Debt Consolidation and Personal Finances: Learn the Truth!

    An inability to manage credit, growing debt and bankruptcy are... Read More

    The ONE Law You Should Be Breaking

    There is a law all smart people break.Parkinson's law.Parkinson's law... Read More

    How To Get Out Of Debt

    If you have found yourself in a position where you... Read More

    Purchase Your Future Now While It Is Still Inexpensive

    Leaving school, getting a new job, or even a raise... Read More

    Debt Collectors; And what you can do to Get Them Out of your Life

    FTC opinion letter on validation Section 809(a) of the FDCPA,... Read More

    Deal with All Your Debts with Care!

    Lots of people take a large ammount of loans and... Read More

    Life After Debt ? Strategies for Dealing with Problem Debt

    Honorably and ethically rid yourself of burdensome debts using the... Read More

    The Last Debt Solution Should Be Bankruptcy

    A debt solution like bankruptcy should really only be used... Read More

    Credit Counseling ? Signs That You May Need Help

    Credit counseling is a viable option for those who are... Read More

    How to Deal with Bill Collectors

    So you've screwed up. You're drowning in debt. Maybe the... Read More

    Bankruptcy Interest Increases as Deadline Approaches

    Congress recently passed sweeping legislation that will significantly reform American... Read More

    Credit Card Debt Freedom is Possible

    Credit card debt have you drowning financially? You're not alone.... Read More

    Life After Bankruptcy

    Bankruptcy and Credit - What Happens After Your Debts Are... Read More

    What Are The Benefits and Consequences Of Getting Rid Of Debt The Easy Way

    We have all experienced getting so far in debt we... Read More

    Debt Help and Advice for the UK

    At some time or another during our lives most of... Read More

    5 Ways to Get Out of Debt

    It has been said that everyday more and more people... Read More

    Tips For Saving Money

    Still living from pay to pay? Or envying those great... Read More