But what is an IVA finally?

It is a binding arrangement between you and your creditors, which ensures that if making monthly payments regularly for a specified period of time, you can settle your debt, and become debt-free at a date you know beforehand. These payments are agreed, affordable, and lower amounts than you had to pay before the IVA, and the process is protected by the government, so it’s totally legal. What’s more, it helps those who are in financial difficulties to have a formal arrangement according to which any outstanding debt will be written off as long as they have successfully completed the prescribed period. All in all, an IVA is a solution even to the serious debt problems, which guarantees you become debt-free within 5 years. Don’t you believe it, do you? Getting back the control over your financial situation is really possible with this method, which not only decreases your monthly repayments, but also stops the interests and other charges on your debt!

Being a legal agreement, an IVA can only be set up and managed by a certified Insolvency Practitioner.
This person is an expert who will only recommend you an IVA if that’s the best solution for you. While making the assessment of your suitability, he will take into consideration not only your financial circumstances, but also the other possible choices you could make besides an IVA solution. An Insolvency Practitioner also acts as a supervisor, and monitors the IVA’s progress and checks if the terms and conditions are being kept. It is your responsibility to pay the agreed payments to this specialist who ensures that these payments are given to the creditors. However, if the debtor does not pay regularly is almost sure that the Individual Voluntary Arrangement will fail.

	Do you want more details, don’t you?
	If you’re eligible for an IVA and the specialist agrees that it is the best solution for you, they make up a ‘plan’ for you based on the assets you have, and what is the amount you can reasonably afford as a realistic repayment each month. Your creditors will get this ‘plan’ as a proposal, and after that they have the chance to vote in order to accept or to reject your IVA. Generally speaking, if the majority (that is to say, creditors whom you owe 75% of the total debt value or more) agrees, your IVA is accepted.
	Are you curious how does this work?
	The insolvency specialist will ask you some questions referring to your current financial situation. This is needed as the new repayment amount is build upon your current situations of your finances, that is to say, your income minus your indispensable expenses. After this amount is agreed by you, creditors will have to vote if they agree or not with the arrangement. This haggling process between the debtor represented by the so-called insolvency practitioner and the creditors will most probably end up with creditors agreeing with the IVA. If this is the case, a legal contract will state the repayments agreed by you beforehand.

Let’s move on to some details regarding the IVA contract. This states how much you have to repay the creditors as well as the period of time during which the IVA is available. You usually will need to repay around £200 each month. After the agreed period, that is usually 5 years, the rest of the debt is legally written off and creditors are also prohibited from forcing you to pay additional amounts or charges. Can you believe that 65% of your debt can be written off by an IVA depending on your specific circumstances? That sounds a miracle! However, don’t forget that in order to an IVA to be successful you have to pay each month regularly! As if you don’t meet the requirements of the IVA, your creditors can still force you to bankruptcy.

	So why to use an Individual Voluntary Arrangement?
	The main advantage of this solution compared to bankruptcy is that you can keep your house or your other assets. Moreover, after the end of the repayment process, the consequences of the IVA are not as severe as they are in the case of bankruptcy. An IVA also has the benefit of offering a real solution compared to the informal debt solutions. An IVA legally states both your and your creditors’ responsibilities and duties. You will have a reduced payment only once in a month for five years. It’s true that this is not a short time, but if you think about the exact date you know you will be debt free, it isn’t unbearable. Another remarkable thing is that you won’t have any additional fees, as creditors are stopped to charge you more than stated in the IVA agreement. It is equally important that you do not confuse the Individual Voluntary Arrangement with the Debt Management Plan, which is not legally binding, and it has another drawback, namely although it can greatly reduce your monthly repayments, you still have to pay back all of your debt, which can take a very long time. Moreover, your creditors may charge you with additional fees.
	So are you ready for a real solution to your debt problems?
	Consider an Individual Voluntary Arrangement before filing for bankruptcy, and get back the control over your personal finances! An IVA will help you to make an agreement with people you owe money to. This is good for your creditors, but it’s advantageous for you as well. Please remember, that you’ll have to make reduced payments as you have to pay off only a percentage of what you totally owe. Within five years all your debt will be settled, and you can finally breathe freely and make a new financial start. Does it sound great? Isn’t it simple? Go ahead with your own Individual Voluntary Arrangement! Good luck!