An IVA is a legal agreement between a person in debt and the creditors they owe. It is seen as a being a better alternative to bankruptcy for all parties. In order for an IVA proposal to be accepted, 75% in value of the creditors have to agree to the proposal. On acceptance the creditors agree to accept lower repayments over a set period of time and also agree to freeze the interest and charges on the debts owed to them.

An IVA usually lasts for 60 months, on completion any outstanding debts are written off and the debtor is deemed as being debt free.

UP TO 75% OF UNSECURED DEBTS CAN BE WRITTEN OFF WITH AN IVA

An IVA can be obtained by either tenants or homeowners with over £10,000 of debt.

For your IVA proposal to be accepted, 75% of your creditors have to agree to the proposal.

An IVA usually lasts for 60 months. On completion of an IVA, any outstanding debts are cleared and the debtor is deemed debt free.

An IVA covers unsecured debts and can include credit cards, store cards, unsecured loans, debts owed to banks, finance companies, the Inland Revenue, HM Customs and Excise, even personal loans from friends and family.

If you are turned down for an IVA you will have guaranteed acceptance onto a debt management plan. Alternatively you could look at bankruptcy proceedings.

An IVA is a confidential agreement. It should not affect your employment or business activities.

If you have CCJ's or bankruptcy orders you can still apply for an IVA.

Typically an IVA takes between 6-8 weeks to set-up.

An IVA is seen by the majority of creditors as a better alternative to one of their debtors becoming bankrupt. However there is no legal obligation for them to accept the IVA proposal. For an IVA to go ahead 75% in value of your creditors need to accept the proposal. If this is achieved then the IVA will be applicable.

An IVA is a legal agreement, if you fail to make payments then bankruptcy proceedings can be initiated against you.

Should your circumstances change either for better or worse, it can be requested that the terms of the IVA be altered to reflect your new circumstances.

No, as an IVA is a legal process, you are unable to obtain further credit during the period of the IVA.

However once an IVA is satisfied, you will start to see your credit rating improve over time and as such you will be able to obtain further credit in the future.

There are no up-front costs to an IVA. A small percentage of the contributions made to your creditors will be used to reflect the costs of setting up and managing the IVA process.

An IVA is a legal process, once it has been set-up it cannot be cancelled.