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What Does IVA Stand For ?

IVA stands for Individual Voluntary Arrangement. This is essentially a formal agreement between you and your creditors in which you arrange to make reduced payments to pay off your debt. This will be set up for you by a professional known as an Insolvency Practitioner (IP) who is chosen by you to oversee your IVA through until the end. Generally after 5 years your debt will be classified as settled.

What is the purpose of an IVA?

An IVA can provide you with a formal debt solution and is used to help those in debt who can not meet their current repayments. An IVA must be agreed by 75% of your creditors but means you will not be threatened with any legal action during the IVA, providing you stick with the terms. It will also help you to keep up to date with your main repayments such as your mortgage or rent, along with living costs.

How can an IVA help?

When you enter into an IVA it prevents your creditors from harassing you for repayments as they cannot contact you directly and must instead go through your IP.

Who is an IVA suitable for?

An IVA is suited in the main to those with debts of over £15,000. In cases where the person in debt owns a property then it means the creditors cannot force you to sell this. The reason for this is that once the IVA has been arranged they will settle for obtaining as much equity as they can through remortgaging the property.

An IVA is also useful if you should have an occupation then could be effected if you were to declare yourself bankrupt. This includes financial professions such as accountants or those in legal professionals such as solicitors. It will also include jobs that have a certain level of responsibility such as an MP and therefore offers you debt solution without the risk to your career. It is also worth noting that unlike bankruptcy which will be made known in the local press, an IVA need not be made public to anyone else.

If you are considering any form of debt help then make sure you discuss all of your options with a professional.