What happens with an IVA?

An IVA is an Individual Voluntary Arrangement. This works as an agreement between you and your creditors as a way of settling your debt within a five year period.

The amount you repay on a fixed period is worked out by assessing your monthly income and disposable income, from this it can be agreed what you are to pay back. There are IVA pros and cons.

One good thing is that in agreeing to an IVA from that point no more interest shall be charged to it as it is frozen at the point you agree, also this agreement can reduce the amount you have to repay, up to 65% in some cases!

The IVA is a very good idea by the looks of it, as long as you keep your agreed payments and do not fail to meet the conditions legally agreed to.

Your creditors will not suddenly demand extra payment as by law they cannot ask more from you than what was specified in the IVA. This applies to the creditors as much as to yourself.

In summary I think the IVA is a very good idea and not something which is likely to worsen a situation. If you think about it you are formally setting down to repay debt. Also you are doing so with a level of protection you could not get elsewhere. But, the major bonus would be that without such a thing it could be likely for the person to have to declare bankruptcy which only serves to bring bad news in the future. An IVA can work.