An Individual Voluntary Arrangement (IVA) is a formal debt repayment arrangement between you and your creditors, which can freeze interest and charges. A review of your financial position is undertaken and based on this a proposal is put to your creditors detailing the assets and income you have available and an affordable offer for repayment, usually over a period of 3 to 5 years, is made. Creditors then have the option to accept, reject or modify this proposal.
IVA’s are a popular alternative to Bankruptcy for an individual, as the restrictions are less severe, for example a company director or sole trader can continue to manage their company and the individual has a greater amount of control over the repayment offer made to creditors.
Each IVA is tailored to meet each individual’s circumstances, which may allow certain assets which would normally be seized and sold in Bankruptcy to be retained by the individual and prevents creditors taking further legal action or pursuing debts due.