IVA Debt
An IVA is not the same as a Debt Management Programme.
An IVA is arranged to help you pay off your debts in a way that is affordable
to you.
Individual Voluntary Arrangements
WHAT IS AN IVA?
An IVA is an alternative to bankruptcy introduced by the government
as part of the Insolvency Act 1986. It enables an individual in debt
to make a proposal to the people they owe money to, to reach a settlement.
Should the proposal be approved by the majority of the creditors, the IVA then
stands as a contract that binds all parties and prevents any further action.
A standard IVA will offer to pay whatever is affordable monthly into a fund
over a five year period, and after that the debt is cleared. This can be the
case even if the creditors end up getting less than 30% of their debts repaid,
and so monthly payments into an IVA can be as little as £200 per month.
Payments
are based on what an individual or household can actually afford and are normally
over £300-400, but still tend to be significantly less than the existing
minimum payments on credit cards and loans. IVAs are becoming an increasingly
popular choice for the over-indebted in the UK.
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