IVAs & Bankruptcy

Choose from the following topics:
What is an Individual Voluntary Arrangement (IVA)? <
How and why would a creditor accept a lower amount?
What do I have to pay for this advice?
The Advantages of an Individual Voluntary Arrangement
The Disadvantages of an Individual Voluntary Arrangement
The Advantages of Bankruptcy
The Disadvantages of Bankruptcy
The IVA Process

What is an Individual Voluntary Arrangement (IVA)?
An IVA is a legally binding agreement between an individual and their creditors. It provides a mechanism by which an individual struggling with a high level of personal debt can clear all their debt.

Typical IVAs last for 5 years and are contribution based. This means that the individual makes regular contributions out of income. IVA’s do however take different forms.

Generally speaking if what is being proposed by the individual will provide creditors with a better outcome than would be achieved in bankruptcy, then creditors will consider any reasonable offer. The repayment proposal is always based on what you can afford to pay during the time agreed.

In a contribution based IVA you are required to make regular monthly repayments for the term of the IVA. The proposed payments can be significantly less than the full amount of the debt owed, but your creditors would be accepting the offer in full and final settlement of their claim.

This means that after this term any balance remaining on your debts is written off.
Once agreed, an IVA will also prevent creditors from adding any further interest to your debt or taking any further action such as obtaining County Court Judgments.
The suitability of the IVA solution will depend on your personal circumstances. We will advise you on this. Normally your personal debts must be above £15,000.

An IVA must be supervised by a licensed insolvency practitioner who is responsible for negotiating with your creditors and regularly reviewing your circumstances.

Homeowners may be required to release a proportion of the equity in their home and contribute this to their creditors, or perhaps to provide alternative or third party funds to the same value.