IVA (Individual Voluntary Arrangements)

The main advantages of an IVA are:

• At the end of the agreed IVA term you will be free of unsecured debt, whether or not you have paid your creditors in full (the effect on your credit rating will last for 6 years).
• You only pay what you can afford over a fixed period of time, usually an IVA term is five years.
• Interest on your debts will cease to accrue as creditors are required to prove their claims for an amount.
• People often think an IVA is like going bankrupt - it isn't the same. However if the IVA fails this could lead to bankruptcy.
• An IVA is not advertised in the regular press and your employers will not be told. Details are published on the Insolvency Service register.
• The IVA is binding. In other words, once it is set up, creditors cannot change their minds.
• Creditors must deal directly with your insolvency practitioner rather than with you, so any threatening letters or telephone calls you may have been receiving will stop.
• Your home may also be protected in an IVA. In certain instances you may however be required to re-mortgage your property after 4 years in order to release any equity to pay off some or all of your debt.