Individual Voluntary Arrangements (IVA's)

What is an IVA?

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An IVA is a formal arrangement between you and your creditors. In order to get an IVA you will need the help of an Insolvency Practitioner who will write up a legally binding agreement that you and your creditors will sign up to. Most IVAs will last for 5 years but this can change depending on your situation. Once your agreement ends, you will no longer have the debt. You will be considered for an IVA if you have debts over £15,000 and have a reasonable amount of income left over each month after living expenses.

What are the advantages of an IVA?

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The advantages of an IVA are:

  1. An IVA is flexible and will only be based on your situation i.e. what you could pay back each month.
  2. You are less likely to lose your home or your job than if you become bankrupt.
  3. IVA's can sometimes be cheaper than bankruptcy.
  4. If you own your own business you will be able to continue with this.


What are the disadvantages of an IVA?

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The disadvantages of an IVA are:

  1. If the IVA fails, you may be forced into bankruptcy.
  2. Your repayments may be higher and go on for longer than if you became bankrupt.
  3. An IVA may not cover all your creditors i.e. your mortgage lender.
  4. If you own your home or own anything of value, creditors may force you to sell these before they will agree to your IVA.
  5. Be aware of costs as some Insolvency Practitioners may ask for a fee up front. Seek advice if you find yourself in this situation.
  6. Creditors may not agree to your IVA.
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