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An Individual Voluntary Arrangement is a measure that you can take if you’re worried about meeting your debts. People and companies that are trying to avoid bankruptcy use IVAs as a measure to keep them from down this route.

If you’re in a position where you are going to be unable to meet your credit payments, you can seek the advice and services of an Insolvency Practitioner. This is a professional individual who is authorised to give you insolvency advice. They will likely suggest a series of measures to help you or your company’s position, and one of these may be an IVA.


If you owe debts that you’re not going to be able to make the normal payments for, your creditors will prefer to receive some funds rather than none, and so they will likely be amenable to any proposals you may make to pay the debt back.

An IVA is when you agree to paying a certain amount over a period, according to your ability. The agreement is a legal contract, and therefore offers the creditors some level of guarantee that they will receive payments through which you will eventually pay your debt to them.


To use an IVA, your Insolvency Practitioner will make the arrangements to make a formal proposal to the creditors via the court system.

The first thing that happens is that you apply to the court for an interim order, which effectively freezes the action that the creditors can take during a set period. During this period your proposal is presented to the court, and outlines what you are proposing to pay each month towards the debt that you owe.


Often, the creditors will have a meeting at which they will discuss whether to accept your proposal or not. Your Insolvency Practitioner will send details of the meeting to all the appropriate creditors who then have a vote as to your proposal.

If they vote to accept it, the creditors are then legally bound to the agreement, as are you. Your Insolvency Practitioner will then handle payment of the agreed funds to the relevant creditors.


The Practitioner should also make clear to you any fees that are payable for their services, and should communicate with you about how to go about paying the agreed amounts, i.e., making decisions about selling any assets that you may have etc.

An IVA is typically used to avoid bankruptcy and can help you to preserve your financial situation much more effectively and flexibly. The IVA is one of the measures encouraged by the government to help reduce the number of individuals and businesses that end up going bankrupt.


One of the main advantages of using an IVA is that you’re then legally protected from any further steps that your creditors may have chosen to take regarding the debts, as long as you continue to meet the terms laid out in the agreement. It therefore gives you a level of security as well as helping you to obtain financial stability.

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