An IVA (Individual Voluntary Arrangement) could be a big help if you’re struggling with unmanageable unsecured debts. It works by enabling you to repay only what you can afford, and writing off what’s left.
To set up an IVA, you’ll need the help of an Insolvency Practitioner (IP). It’s a legal process, so your IP will need to take care of all the formalities for you.
How an IVA is arranged
To begin with, you’ll need to speak with a debt adviser (or your IP) about whether an IVA is the best solution for your circumstances. If it is, you can move onto the next stage with your IP.
You’ll work with your IP to draw up an IVA proposal – a formal document setting out your case for an IVA. This will provide your unsecured lenders with details of your financial situation and the proposed terms of your IVA.
For your IVA to go ahead, this proposal must be agreed by 75% of your lenders (by debt value).
What happens if it’s agreed?
A typical IVA involves making monthly payments for five years (although the timescale can sometimes vary).
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