IVAs and managing debts

IVA stands for individual voluntary arrangement. It is a legal process that allows you to make monthly payments towards your total debt over a set period of time, which is usually 5 years. These payments are worked out according to what you can afford to pay and how much you owe. In some circumstances a lump sum is required along with monthly repayments.

Homeowners who have equity in their property have their situation reviewed in the fourth year of the IVA. They may be asked to pay an additional lump sum as part of the arrangement.

Providing you keep to the terms of your IVA and keep up with the payments, you are protected against any legal action to recover your debts.

At the end of the IVA, any remaining debt is written off.

Setting up an IVA

An IVA is arranged by an insolvency practitioner (IP) who draws up a proposal and sends it to your creditors. If creditors representing at least 75% of your total debts agree to the IVA, it can go ahead.

IVA debt management advice

If you need more information about IVA debt management, you can get free, impartial advice from us. Our online debt counselling service CCCS Debt Remedy will find the best debt solution for your particular circumstances and can tell you if an IVA is suitable for you.