An IVA (Individual Voluntary Arrangement) is a formal agreement made between the person in debt and their creditors. Once you enter into an IVA, your creditors can no longer take further action against you to recover any outstanding debts. All interest and charges associated with your debts are frozen.
All IVAs are set up and managed by an Insolvency Practitioner (IP). An IVA is a form of insolvency that can potentially cover up to 90% of your debts. It is an alternative to bankruptcy and other debt solution plans.
In an IVA, a single payment is agreed based on your financial situation. The payment is then divided between the unsecured creditors over a set period of time (usually five years), after which any remaining debts are usually dealt with in a different way.
Once you enter into an IVA, your creditors are legally bound by the terms and conditions imposed by the agreement.
There is no legal maximum or minimum amount you must owe to get an IVA. Usually, however, you must owe at least £5,000 to get your creditors to agree to the IVA. You can owe this amount across more than one debt, with more than one creditor.
An IVA is open to residents of England, Wales and Northern Ireland. Scottish residents can find support in the form of a Protected Trust Deed (PTD).