There are so many people and services claiming to have the answer to your debt problems that it can often be difficult to figure out what each solution actually involves. Individual Voluntary Arrangements are often put forward as an easy answer to financial insolvency, but only the right advice can help you to know whether they will in fact help you personally.
IVAs are intended for people who can no longer meet their debt payments and are potentially facing bankruptcy. An IVA is a way of avoiding bankruptcy by striking a deal with your creditors, according to which you will pay back at least part of what you owe them.
Proposal
Getting an IVA is dependent on your creditors agreeing to it, so your Insolvency Practitioner will draw up and put forward a proposal that you will sign up to. The arrangement will outline a period during which you will make certain payments, although these can be reviewed during the term.
Payments
It is generally the case that the payments will not work out at less than £200 per month. IVAs are normally used for people with debts totalling £12,000 or more, and owed to at least 3 bodies. The term of an IVA is normally around 5 years.
Reviews
Although an IVA is a legally binding contract, there is a little flexibility built into it. For example, your IP will continually review your finances throughout the period, and may talk with you about making changes to your payments on this basis.
Credit
You will no be able to get further credit or unsecured lending while the IVA term is being carried out. Once the IVA is complete, and if you have managed to keep to the terms, the debts concerned will effectively be written off, and you will then be able to seek credit again.