An Individual Voluntary Arrangement (IVA) is a legally binding agreement between an individual and their unsecured creditors that enables the individual to deal with their debts and repay them all, or part of the debt over a period, which is typically a 5-year period. Sometimes, the individual may decide to make a one- off payment if they do not have surplus income, decide to sell one of their assets, or if a family member or third party offers to make a voluntary lump sum payment into the IVA arrangement that would not be available in bankruptcy. The individual will be able to keep their assets and remain in control. An IVA is an alternative to personal bankruptcy.
An IVA can write off significant levels of unsecured debt. The individual will not be faced with the constrains of bankruptcy and they will keep their personal assets, unless any assets have been voluntarily offered into the IVA proposal.
An IVA can only deal with unsecured creditors and any secured debts will have to still be made as a secured creditor can apply to repossess your home if the ongoing payments are not met.
In most IVA’s the interest is frozen and there is no minimum or maximum dividend and it will depend on the individual’s personal circumstances and the individual will need to make a full disclosure of their assets and liabilities.
At the end of the IVA period, the remaining debts will be written off and a certificate of completion will be sent to the individual and all creditors in the IVA.