IVA stands for Individual Voluntary Arrangement
This is a formal solution to your debt problems – you enter into a legally binding agreement where you make a single monthly payment to an IP, or Insolvency Practitioner (who takes a fee from the money that you pay over).
In return your creditors agree to stop contacting you, accept your payments and write off any amounts that you owe providing that you stick to the agreement.
IVAs generally last five years. If you cannot make your payments for the full five years your creditors do not have to write off your debt, and you will have paid fees to the IP that you won’t get back.
It’s really important to stick to an IVA, so you shouldn’t enter into one lightly and especially if you’re not sure that you will be able to make the payments each month. Don’t be fooled into thinking IVAs are an easy, quick fix to your problems.
The Association of Business Recovery professionals (R3) have produced a booklet which explains the implications of entering into an IVA in more detail.
