Guidelines for Individual Voluntary Arrangements (IVA)

An Individual Voluntary Arrangement is a Government initiated policy to help severely indebted people become free from debt and is an alternative to bankruptcy. An arrangement can only be prepared and supervised by a licensed insolvency practitioner.
An arrangement will normally last 5 years and the client will pay from disposable income and assets. They will pay as much as they can afford of the debt. If they have assets to pay the debt in full a re-mortgage or secured loan may be a better option.
Credit history will be affected for up to six years.
The creditors will write-off any debts not repaid in full at the end of the arrangement. In some circumstances this may be as much as 70%
The debtor must have unsecured debts in excess of £15,000 and a minimum disposable income after living expenses of £200 to offer the creditors.
The debtor may be asked to re-mortgage their property in year 4 or 5 of the arrangement if they have more than £5,000 of available equity.
They must be employed or self employed and have a regular monthly income.
Help is only available with unsecured debts. Mortgage, secured debt, hire purchase are all payable as part of normal living costs.
Debt agreements for loans must be at least 6 months old and no more credit can be taken during the proposal process or after approval
A new bank account will be required in all cases were they owe their existing bank any money. By way of overdraft, loans or credit cards.