What is an IVA?

An Individual Voluntary Arrangement or IVA is a formal agreement between you and your creditors where you will come to an arrangement or agreement with people you owe money to, to make reduced payments towards the total amount of your debt in order to pay off a percentage of what you owe then generally after 5 years your debt is classed as settled.

How does an IVA work?

Once a decision has been made that an Individual Voluntary Arrangement is right for you, you will be asked questions regarding your current financial situation. Based on the information you give a repayment amount will be agreed with you.
No creditors will be able to take legal action against you once an application is made to the court for an Interim Order.
For an IVA to be approved, creditors will be called upon to vote either for or against the arrangement. If only one creditor votes "for" the Individual Voluntary Arrangement - IVA, the Individual Voluntary Arrangement - IVA will be approved. However, if only one creditor votes against the Individual Voluntary Arrangement - IVA and they represent less than 25% of your total debt, the meeting will be suspended for a later date and other creditors who did not vote will be called upon for their vote.

If the creditor who voted against the IVA represents more than 25% of the total debt you owe the IVA will fail. This is because an Individual Voluntary Arrangement - IVA will only ever be approved if 75% in monetary value is voted for. If any of the creditors don't vote, it is assumed that they will vote for the IVA.

During the period of your arrangement your financial situation will be reviewed regularly to see if there has been any change in your financial condition.