An IVA (which is short for Individual Voluntary Arrangement) is a legally binding arrangement that changes the terms of repayment between you and your creditors. It is typically used when you have little or no chance of repaying the full amount to each creditor, and the creditors recognize this and are anxious to recover at least some of their money.The main advantage that an IVA offers to you is that up to 75% of your debt will be written off if you adhere to the terms of the agreement. You can also avoid the hassle and stigma that comes with having to file for bankruptcy, as with an IVA your professional status remains unaffected and no information is made public.You should contact an IVA practitioner if you think that an IVA is the best way to proceed with dealing with your debt problems. The sooner you do this, the better, as they will be able to apply for an interim order which prevents any bankruptcy petitions being filed against you whilst the IVA is under consideration. Other types of legal action are also prevented, so you can get yourself a brief period of respite to re-organize yourself.

The insolvency practitioner presents details of your IVA proposal to the court and asks for a creditors meeting to be called to consider the proposal. If the court agrees to the meeting, the date of it and details of the proposal are sent to your creditors. It is important to be totally open and honest about who you owe money to, and how much you owe them, as only those creditors who were told about the meeting will be bound by the terms of the IVA.At the meeting, your creditors vote on whether to accept your IVA proposal. The IVA will come in to force if more than 75% of your creditors vote in favor of it. It then becomes binding on all creditors who had notice of the meeting, even if they did not attend. Your IVA practitioner will then supervise the arrangement and pass payments onto the creditors in accordance with the IVA. If you make the necessary payments on time for the duration of the IVA then at the expiration of it then you will be debt free.