If you have significant debts of above fifteen thousand pounds, and you are currently having problems making all of the repayments, the chances are that an IVA or Individual Voluntary Arrangement could help you. It is a government-approved, legally binding agreement between you and your creditors and it could result in you having your debts reduced by as much as seventy five percent.

On your behalf, an advisor will make a proposal to a meeting of your creditors, if it is agreed by twenty five percent of them, then you will pay a monthly affordable amount towards your debts into the IVA fund. Your advisor, an Insolvency Practitioner will administer this for you and as long as you keep up your repayments, you will be free from the debt within five years. An IVA can only take into account unsecured debts.

In some circumstances, you may find it difficult to keep up the repayments. This is a serious situation and if you fail in your arrangement, bankruptcy may be your only hope. However, your Insolvency Practitioner (IP) can arrange or negotiate for you to have a short payment holiday in order to try to rectify your financial situation, before restarting your payments. Needing a payment holiday can be for many reasons such as becoming sick or losing your job, and a reasonable payment holiday can be issued in order to allow you to recover or find new employment. Any months that you miss due to a payment holiday will simply be added to the end of the arrangement. If you are unable to restart the payments to the IVA, then the IVA will fail and your creditors will begin to take legal action against you.

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