IVA (Individual Voluntary Arrangement) was introduced by the Insolvency Act of 1986 and is effectively an alternative to bankruptcy.
An IVA allows an Insolvency Practitioner to negotiate for a person with substantial debts, typically in excess of £15,000 and to make a formal proposal to their creditors. If the proposal is accepted by the creditors the IVA becomes a legally binding contract.
Once an offer is accepted monthly payment are arranged based on what the debtor is able to reasonably afford and is normally spread over five years.
In many cases the debts can be reduced by up to 75%
If the debtor adheres to the terms of the IVA the debt is cleared at the end of the arranged term
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