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Individual Voluntary Arrangements or commonly known as an IVA is a court sanctioned agreement made with your creditors to pay off your debts over a set period of time – usually 60 months – and is one option you can use to pay off your debts. They are set up by an insolvency practitioner, who is usually a solicitor or an accountant.
Individual Voluntary Arrangements IVAs can be set up to suit your needs, but they can be expensive and there are risks to consider. For example, if you default on payments and exit the IVA, your creditors could start pursuing you again to set up separate monthly payments, or you could even be made bankrupt (which seldom happens, to be fair).
Most non-priority debts can be included in an IVA, including:
You can also include priority debts such as:
Debts you can’t include in Individual Voluntary Arrangements or IVA are:
If some of your debts were taken jointly with another person, it might not always be appropriate to include these in an IVA, as the other person might still be liable for any debt left at the end of the IVA. People taking out debts in both names are ‘jointly and severally liable’, which means you are both liable for the full amount of the debt, not half each.
Please note: You can’t take out an IVA jointly with the other person who shares your debt (it is, after all, an Individual Voluntary Arrangement). If you have a number of joint debts, an IVA might not be a suitable solution for you.
An IVA may be right for you if:
The prime reason for entering into an IVA is to protect assets. If you are in rented with an everyday job, then an IVA is a very expensive debt solution. In these circumstances, and especially if you have more than £15,000 debt, bankruptcy is the better solution.