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Individual Voluntary Arrangements
A very flexible solution that has seen a massive upsurge in usage. Originally designed to cater for struggling sole-traders it is largely used now for consumers.
Creditors are offered a combination of debt excuse and debt deferral to allow the individual to pay only what they can afford over a prolonged period.
Creditors must approve any IVA structure.
An IVA is suitable when someone is unable to pay off their debts but does not want to file for bankruptcy. It can be an attractive option to all parties including the creditors as often it presents for them a better result than under bankruptcy.
It is crucial that contributions to an IVA are based on what individuals can afford, not what creditors are asking for. This way payments can be realistically afforded without new debts growing in order to fund the IVA.
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