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An IVA (Individual Voluntary Arrangement) is a legally binding agreement that protects you against any future action from creditors. This is done by either having your interest frozen and, possibly, a significant amount of the debt written off. It can be an attractive alternative when choosing how you want to clear your debts.

An IVA is arranged between you and the people you owe money to, and it takes place over a fixed period, usually five years. IVAs are becoming increasingly popular in Britain amongst those who are struggling to keep up with their repayments. They offer a very useful and real alternative to bankruptcy, especially among creditors as they generally stand to recoup more of their money with an IVA than they would from bankruptcy.

Typically, an IVA agreement will see a creditor agree to write off a proportion of the debt owed to them. In return the debtor agrees to pay a fixed proportion of their monthly income towards the debt for a period of five years. 

An official debt repayment plan in most cases includes the freezing of interest, reduction in the total amount of debt owed, and legal protection from creditors.

*    fixed repayment period (typically 60 months)