An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your (lenders) creditors. It is generally appropriate for people who are unable to make their monthly repayments in full but who do have some money to give to their creditors each month.

An IVA proposal sets out how you are going to repay your creditors, usually over a period of five to six years. The IVA can also take the form of a lump sum raised from the sale of an asset such as property or an insurance policy or a contribution from friends or family.

. You may only pay back a percentage of your debts and be free from making further payments after completion of the arrangement.

. You only have to make one monthly payment.

. The Arrangement is legally binding so that your creditors cannot change their minds once they have agreed.

. Once the IVA is in place your creditors cannot bring any other action against you as long as you maintain your reduced monthly payment.

. IVAs are only suitable if you have the means of making your creditors a reasonable offer of repayment.

. Your creditors have the opportunity to agree or disagree with the arrangement through a vote. However, most Insolvency Practitioners will not suggest this course of action to you unless they think there is a good chance your creditors will accept.

. If you do not make the payments to the IVA it is likely that the Arrangement will fail and your creditors will be able to take other action against you.