Individual Voluntary Arrangement 

An Individual Voluntary Arrangement or I.V.A. is a legal agreement between you and your creditors to repay a percentage of your unsecured debt. There are certain requirements which apply to an I.V.A. before you can apply. The total debt must be greater than £15,000 and be with more than 4 creditors. You must also have a regular source of income to guarantee monthly instalments, as the payments are based on your own personal circumstances and affordability.

You would make reduced payments towards the total amount of your unsecured debt in order to pay off a percentage of what you owe, then generally after 5 years your debt is classed as settled. There are no up front fees, however, a percentage of the total amount paid will be taken to pay the Insolvency Practitioner, who is qualified to overlook the work carried out in the set up and administration of the arrangement.

The majority of I.V.A.'s are agreed with the client making monthly contributions based on your monthly surplus paid over 5 years. Any assets you have will also be taken into account; any equity in your property for example. Once your offer has been decided under the advisement of your Supervisor, a report detailing the offer will be distributed to all of your unsecured creditors. A meeting of creditors will then be called where your creditors will vote to decide whether the offer is accepted. Each creditor’s vote is equal their percentage of the total debt. For the IVA to be accepted there must be a vote of 75% or more of the creditors agreeing to the proposal. At this meeting, creditors can request changes to the terms called “Modifications”. If their modifications are not accepted, then the creditor would request that their vote be counted as a rejection. If accepted, the IVA terms become binding on all creditors in the IVA, whether they voted to accept or not.

Once the IVA is agreed, there should be no direct contact between you and your creditors, with any communication being done through the I.V.A. supervisor. You will be safe from any court action in relation to your unsecured debt as long as your comply with the agreed terms of the arrangement.

For more detailed information or if you have any queries about I.V.A.'s or the companies that provide this service, please call us on 0800 917 4607 and we will be happy to help or you can download our fact sheet from our website, which can be found here “downloads”, by clicking the "Individual Voluntary Arrangement fact sheet" link.

For more detailed information please download our IVA factsheet here.