IVAs (Individual Voluntary Arrangements) form part of the Insolvency Act of 1986 and an IVA designed as an alternative to bankruptcy for people with high levels of unsecured debt.
IVA is a formal agreement between the indebted person and their creditors. Your IVA can only be put forward by a licensed Insolvency Practitioner (I.P), and your appointed I.P will put forward an IVA proposal on your behalf.
The IVA proposal sets out the details for a proportion of your debt to be paid back to your creditors over a period of time. On completion of your IVA agreement which is typically 60 months, any debt that you have not paid is automatically written off.
If you are wondering an IVA is the Government Legislation which can “write off 80% off your debt” (or more!), you have probably seen it advertised on daytime TV or local radio. The claim is that your unsecured debt can be written off “using the little known piece of government legislation”.
Although the adverts are referring to the IVA (Individual Voluntary Arrangement) government legislation, this statement is virtually impossible for an IVA to achieve and you should avoid any company who makes this claim!
However, an IVA is a reputable and legally binding debt solution designed to for those who are struggling with high levels of unsecured debt. An IVA will reduce your monthly payments and ensure that you only repay what you can afford.