Debt Glossary : IVA
An IVA or Individual Voluntary Arrangement is a form of insolvency which a person with debt problems can choose to enter, stopping short of full bankruptcy.
Under an IVA, which can only be set up by a licensed insolvency practitioner, the debtor agrees to make a certain level of repayments to the creditors over a 5 year period, in return for recovery action being stopped.
Interest charges on your debts will be frozen, and you can propose a repayment program which fits your budget, even if it wouldn't be enough to clear your debt completely.
If your creditors have no objections to the repayment proposal, it becomes legally binding on all parties, and so long as repayments are kept up then no further recovery or legal action against you is allowed.
After a period of five years, all outstanding debt is written off.
For more information see our pages about IVAs and the benefits and drawbacks of IVAs.
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