IVA - Individual Voluntary Arrangements

UK residents who are facing overwhelming debts, and having difficulty affording monthly repayments, may benefit from an Individual Voluntary Arrangement (IVA) or a Trust Deed.

An IVA or Trust Deed is an effective financial tool that allows borrowers to reach an agreement with creditors and avoid bankruptcy, while regaining control and maintaining financial integrity. Both of these legally binding agreements are administered by a professional Insolvency Practitioner who acts as a trustee and liaison between the borrower and creditors.

IVAs are available to residents of England and Wales who owe at least three creditors a total debt of £15,000 or more, while a Trust Deed is available to residents of Scotland who owe at least £10,000 to three or more creditors. Both of these debt relief options prohibit creditors from further contact with the borrower, and from continuing to apply interest or additional charges to the debt. The borrower is required to make monthly payments during the period of enforcement, which is typically five years for IVAs and three years for Trust Deeds.

At the conclusion of the agreed upon repayment period, the remaining debt is written off, which can amount to a savings of as much as 75% for the borrower, while also allowing creditors to receive more money than would have been recovered if the borrower claimed bankruptcy.

An IVA or Trust Deed can help borrowers retain assets which could be lost in a bankruptcy, such as a house or car, and is a more discreet option that is not reported to employers. While an IVA or Trust Deed will negatively affect a borrower's credit rating, these options are not as damaging as bankruptcy, and the borrower's credit is affected for a shorter period of time.