IVA Guide

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A Short Guide to Individual Voluntary Arrangements

The debtor (that's you!) is usually under extreme cashflow pressure and cannot manage the problem. The debtor will be suffering because of firefighting creditors.

This can become all-consuming. Dealing with irate creditors is also a very tiring and lonely process. This can often lead to a downward spiral, sometimes towards ill health and often the bankruptcy of the individual.

What is an IVA?

The best way to think of an individual voluntary arrangement (IVA) is as a deal between the debtor and the creditors.

Where the debtor is the person who owes the money and the creditors are the credit card companies, loan companies, people or businesses to whom the money is owed.

Think of it this way; if you are owed money by someone and they ask for time to pay it, wouldn't you probably agree? Now, if they said that they had a problem and they want to pay you say 33p in the £1 or they will have to go bankrupt and you would get 0p in the £1, wouldn't you also agree to that, as the alternative is nothing?

So, where the debtor cannot pay off his or her debts on time, or they are insolvent (for a definition of insolvency click here am I insolvent? for a guide) or if you are under huge creditor pressure and you cannot deal with the creditors satisfactorily, than an IVA can often be a good solution.

Making a payment on a regular, periodic basis you can bring together almost all of your debt problems (except for secured loans such as a mortgage over property, fines and Child Support Agency debts) and get on with your life.


Who should use an IVA?

It is essential that the IVA is only used where a debtor has regular income. We know that no job is guaranteed for life nowadays, but if you have a lot of debts and if you are employed an IVA is a good option.

Alternatively, if you have a lot of assets that are tied up and you have a lot of debt, an IVA can be used as a control mechanism to prevent bankruptcy and allow time to realise those assets and do a deal with the creditors.

Generally we would advise not to use the IVA tool if you have irregular earnings, or are unemployed.

IVA's a Detailed Guide Click here for much more detail.

If you have any further questions please see our IVA FAQ's Or see our IVA Flowchart.

Please remember - don't bury the problem.

We hope that this guide has been useful for you and that it answers some questions, IVA's are very simple tools in principle but with every case being different we cannot give answers to all questions in this guide.

So, please feel free to call us now on 0800 195 6762 or e-mail us at info@debtless.co.uk to answer your specific personal debt problems, we are happy to help and will not charge for this advice. Please note that choosing this method will affect your credit rating. A time based fee is payable to a licensed insolvency practitioner for this type of work if you propose an IVA..