An Individual Voluntary Arrangement, or IVA as it is known, is a formal alternative for individuals wishing to avoid bankruptcy.
It is a contractual arrangement setup by an Insolvency Practitioner between an individual and their creditors. An arrangement lasts for a fixed term and ultimately results in debt write off on successful completion.
An IVA can be as flexible as an individual’s own circumstances and can be based on surplus income, release of capital, third party contributions or a combination of all of these.
In most circumstances, once an IVA is approved creditors are unable to charge interest and charges on the balance due to them. This is one of the main advantages of an IVA and helps stem the overall debt owed.
Initially developed for individuals who are self employed and experiencing financial difficulties, an IVA can be used to protect a viable business and assist in getting it back on track.
It is also an alternative often used by professionals encountering financial problems such as accountants and solicitors, whose profession is at risk should a bankruptcy order be made aginst them.
In more recent years there has been an increase in employed individuals using an IVA to resolve their debt issues.
For more information about how IVA’s work and whether it is a viable option for you, contact us today for free no obligation advice.