How does an IVA work?

Once an IVA is in place, you make one fixed payment each month based on your budget, for the full term of your agreement.  The amount you pay each month, as just mentioned, would be based on your budget, and you would be expected to pay as much as was affordable. So, if your financial position improved significantly in time - you got a much better paid job, for example - you may be expected to contribute more to the repayments. At the end of your IVA, up to 75% of your debts could have been written off.

You may be able to satisfy creditors by selling an asset, or remortgaging your property, or just by making payments from income, an IVA is that flexible. But whatever is agreed, you have to adhere to it. If you break the terms of your IVA, your creditors would be able to take further action against you, you could lose your home or other assets, and you could still be made bankrupt. Also, if your creditors failed to agree your IVA proposals you could still face bankruptcy.

An Individual Voluntary Arrangement does not place any restrictions on personal credit, although it is likely that your IVA details will be logged in your credit file and may affect your ability to borrow in the future.