An IVA is a legal procedure for people in financial difficulty who have unsecured debts. It is a form of insolvency similar to bankruptcy but has different terms and conditions. Insolvent means that you have a greater amount of debt than the total value of your assets.

You need an Insolvency Practitioner (IP) to arrange an individual voluntary arrangement. Your IP will assess your finances and send a proposal to those creditors who hold your unsecured debt. The IP will propose to your creditors that all your available income (after you have paid your household bills) will be used to make monthly payments to them through an IVA solution. These payments will take place over an agreed period, which is usually 5 years. Sometimes a lump sum may also be paid or a combined lump sum with a monthly payment. At the end of the period, any remaining debt is then written off.

IVA vote

To decide whether the IVA goes ahead, a creditors’ meeting is called and a vote is taken. Creditors representing at least 75% of the total debt need to vote in favour of the IVA proposal for it to go ahead.

Once the IVA is approved, creditors are unable to take any legal action to recover the debt as long as you keep to the terms of the arrangement. A fee is payable but this is included as part of the original monthly repayment when the proposal is agreed.

Once a year, the Insolvency Practitioner reviews your finances and an annual progress report is sent to you and your creditors. You are also notified when the IVA has ended.

IVA help

Our online service CCCS Debt Remedy will be able to tell you if an IVA is suitable for you. If an IVA is the best solution for you, CCCSVA, our IVA service, will support you throughout the process.