What is an Individual Voluntary Agreement (IVA)?
An Individual Voluntary Agreement is a legally binding agreement to repay creditors back over a period of time. The individual agrees to make regular payments to an insolvency practitioner who will divide this money between the individual's creditors. There is no minimum or maximum credit limit.
How does an IVA work?
An insolvency practitioner will submit a proposal to creditors for the IVA. The creditors must vote on the proposal and 75% (in value) of creditors must approve the proposal. Following this approval, monthly repayments or a lump sum repayment is made to the insolvency practitioner who distributes it to creditors. During the IVA period creditors are bound by the IVA and are required to stop charging interest on debts and chasing those debts.
Where monthly repayments are made, the IVA can last for 5 or 6 years and payments can vary depending on changes in income.
How do I know if an IVA is the right choice?
Along with considerations such as not being able to take out any new credit without permission it should be noted that an IVA can be a lengthier and more expensive process than other options. Our team of experts can advise on on whether an IVA is the best option for your individual circumstances. Contact us to discuss your matter today.
