What is an IVA?

An Individual Voluntary Agreement (IVA) is a formal agreement between you and your creditors, offering you legal protection from increasing interest rates, or from charges being added to your debts. IVAs are often seen as a way of avoiding bankruptcy for anyone with a regular income.

In a typical IVA, the creditors agree to write off a certain amount of the debt owed to them. In return, the debtor agrees to pay a fixed percentage of their monthly income towards the debt for a set period of time (usually 5 years).

IVAs are designed to make debt affordable, but will often be ovr-sold as being far more effective than they are in reality. While it is true that a significant part of your debt can be written off, the average is closer to 50% and the highest is closer to 75%, rather than 80% or 90% promised by some organisations. Whether you can qualify for an IVA, and how much of your debt you can write off, is information that you will only be able to discover if you call a debt organisation and discuss your personal circumstances.