When your debts have started to take over your life and you can see no other way to resolve your financial issues, many people automatically think of bankruptcy as their last resort. However, there is an alternative known as an Individual Voluntary Arrangement (IVA) which is far less restrictive but can be just as beneficial for those seeking this level of financial assistance.

Some people prefer to take the IVA route on the basis that they don’t have to endure the stigma or publicity that surrounds bankruptcy cases.

Also, administration costs with an IVA are normally lower than with bankruptcy, thus making more funds available for repayment of creditors.

In simple terms, an IVA is an arrangement between the debtor and their creditors to repay a percentage of the debts owing over the term of the arrangement, usually 5 years. The IVA is closely monitored and supervised by a licensed insolvency practitioner throughout this period.

It is you, via the insolvency practitioner, who makes the decision regarding which assets are made available to the creditors since the IVA is designed to suit the your circumstances.

At the end of the IVA any outstanding debt is normally written off.

You need to be clear from the outset that IVAs, just like bankruptcy, will impact on your assets and your credit record. Unfortunately it’s not just a case of setting up the IVA, paying off a percentage of your debt and just walking away from the rest of what you owe.