Individual Voluntary Arrangement (IVA)

Individual Voluntary Arrangements are essentially an alternative to bankruptcy, whereby a debtor in financial difficulty comes to an arrangement with his creditors on how the debt will be cleared.

Established by the Insolvency Act of 1986, it is a legally binding arrangement conducted via a licensed insolvency practitioner and monitored by the courts. The arrangement is usually conducted over a five-year period where the debtor pays as much as he can afford, after which time he will be released from his debts.

An IVA gives some protection against creditors, but if you own a home you may still be required to release equity from it. Bankruptcy proceedings can still be brought against you if you fail to make the agreed payments.