An IVA is one way of resolving a debt problem. It is a formal arrangement through the courts which is set up by a Licensed Insolvency Practitioner and is intended to be an alternative to bankruptcy.

An IVA might be particularly appropriate where it would take an unacceptably long time to clear your debts by making reduced payments and you wish to avoid bankruptcy.

An IVA begins with a formal proposal to your creditors to pay part or all of your debts. If your creditors vote to accept the offer, it will be legally binding.

Is an IVA appropriate to my situation?
Generally for an IVA to be appropriate you need to have a means of offering your creditors some form of repayment. An IVA will typically last for a period of five years. The arrangement may be funded in the following ways:

• By offering regular payments into the arrangement from surplus income (net income after paying all essential bills).
• By selling an asset and offering the proceeds to creditors in full and final settlement.
• By offering a lump sum from a relative or other third party who is prepared to help.
  

An Insolvency Practitioner will generally give a free consultation to determine whether an IVA is an appropriate route. Fees for setting up and supervising an IVA can be high. However, some Insolvency Practitioners will receive payment from the monthly repayments into the IVA rather than charging a separate fee.

You can obtain names of local Insolvency Practitioners at the Insolvency website by clicking here. You can also ring our Support Lines for further information on 08000 562 561 (England) or 08000 562 561 (Wales).