It’s best to think of an IVA as a way to clear debts rather than to have debts written off. Although in most cases an IVA will mean that you don’t have to pay the full amount of the debts back, it is mainly a way for you to settle your debts rather than having them forgotten about.
If you can’t keep up with your debt payments, there is a risk that you will become bankrupt. When this happens, it is generally the case that less of the outstanding debts are paid back to creditors than, for example, where an IVA is used to avoid bankruptcy. This means that creditors often will opt to accept an IVA, and recoup at least some of the funds owed to them.
Naturally, many people strive to avoid the serious consequences of bankruptcy, and an IVA can indeed help to do this. However, an IVA is designed to suit creditors as well as debtors, and so you will be required to pay back a substantial portion of what is owed if you have the funds available to do this.
An Insolvency Practitioner will need to have a good look at your financial situation to help you to put forward an IVA proposal. Having examined your income, outgoings, assets and total debts, they need to help you to propose paying as much as you can reasonably afford as part of the IVA agreement, while still leaving you enough to live on.
Getting an IVA in place is a negotiation process, and involves striking a balance between what you can manage and what your creditors are looking to receive back from you. In most cases, if you are faced with insolvency this will naturally mean that part of the debts are written off, but of course creditors will look to recoup as much of them as possible. It is up to your IP to act as a mediator between these two interests, and to get a good deal for you.
The best way to view an IVA therefore is as a way to work towards settling your debts as opposed to escaping them.