What is an IVA?
An IVA is a legally binding agreement between you and your creditors to compromise your debts. It is not necessary for you to repay the full amount, simply as much as you can reasonably afford.
The agreement usually has very flexible terms.
An IVA is approved at a meeting of creditors if more than 75% of those creditors voting at the meeting approve its terms. If more than 75% of those creditors who chose to vote do so in favour of its terms the IVA is binding on all creditors who are served notice of the meeting. These meetings are normally not attended by creditors and there is therefore no need for you to attend too.
An IVA will avoid you going bankrupt. Generally, you pay an agreed monthly sum for up to five years. This is divided up between your creditors, who accept the sum in settlement of the amount you owe them. You therefore pay a percentage in the pound to your creditors – the remaining balance is written off.
You can propose a single IVA, or if you and your partner both have debts you can propose IVAs which are to be considered jointly.
An IVA is available in England and Wales. If you are resident in Scotland there is a similar process available which we will be able to provide advice on.
Click here to view the IVA alternatives comparision table (opens in a new window).