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What is an IVA?
The IVA is a powerful legally binding mechanism used throughout the UK which allows you to reduce the amount of debt to your creditors over a period of time which will in turn fix your finances. |
How does an IVA work?
Before you can officially apply for an IVA, the decision needs to be made wether or not you can actually have one. In order to make this decision you will be asked to answer questions about your finances in their current state. Both parties will then agree on a repayment value / amount before any paperwork or proposal is created for you to sign.
Once this has been signed you can then apply for an Interim Order from the court. With this order in place any creditors you may have will not be able to take any legal action against you regarding your financial position with them and subsequently you will be required to attend a creditor meeting.
IVA approval will require your creditors to vote for it. If only 1 creditor votes in a positive way and that particular creditor represents a sum less than 25% of your debt, the meeting will be put back and the remainder of the creditors will be called upon to vote. However if the 1 creditor who voted positively represents more than 25% of your debt then you should be approved for the Individual Voluntary Agreement.
Should you have a negative vote by a creditor who has an outstanding debt of more than 25% of the total debt then your application will not pass approval. If the creditors who vote positively represent less than 75% of the total then your approval will fail.
An Individual Voluntary Arrangement (IVA) is a legal contract so repayments must be met every month in full for the whole term. Once this term is complete you are free from the debts agreed in the IVA. Make sure you notify of any changes to your financial position during the term as this may affect your IVA.
Visit www.aph.org.uk for an Individual Voluntary Arrangement or IVA Application. | 
