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An could help anyone who is experiencing problems repaying their debt. It is an particularly persuasive offer to households who would risk losing their home if they were made bankrupt.

An IVA can help you if;
Your creditors have already refused to accept an informal debt management agreement
You formerly had an informal arrangement, but you could not adhere to its provisions.

You have so many creditors that an informal debt management arrangement would be impractical. You are being made bankrupt, alternatively you are currently bankrupt and you want to reverse that position. You previously had an informal arrangement, but you could not adhere toits provisions.

Your lenders have declined an informal debt management agreement
You are being made bankrupt, alternatively you have already become bankrupt and you want to alter that position.

You are in debt to so many creditors that an informal Debt Advice arrangement would be impractical.

You may have a start up company which you would be unable to keep operating if you became bankrupt. You would be made redundant if you are made bankrupt, jobs such as accountants, solicitors, police man and armed forces. You have a significant amount of money but it is still insufficient to completely repay your creditors. You want a formal arrangement with your creditors to receive that lump sum and write off the balance of what you owe.

You have equity in your house. You wont necessarily lose your house if, with the agreement of the IP and your creditors, it can be kept out of the IVA. However, your creditors will normally ask for as much of the equity in your home as they can get. With an IVA you are not as limited restricted than with bankruptcy. EG, with an Individual Voluntary Agreement you are not obliged to tell your bank. So you can still be able to use your bank account.

The Disadvantages of an IVA
If you are unable to keep to the conditions of your IVA, then the Insolvency Practitioner who is supervising your Individual Voluntary Agreement or your lenders, can ask for your bankruptcy.

If three quarters of your creditors refuse to acquiesce to your proposed Individual Voluntary Agreement (IVA) you are subsequently back to square one. It will be twelve months before you can make another IVA proposal. You should carefully consider your paperwork.
If you are a homeowner, it could be that under the terms of the Individual Voluntary Agreement you have to sell your house. An alternate method is to include a clause in your IVA where you have your home appraised after an agreed time frame with the aim of releasing the “equity” in your property at that time, to your lenders. Your lenders may agree to you paying monthly IVA instalments for an additional year to cover the amount of equity in your home.

If your financial position alters and you are unable to afford the repayments, unless your Insolvency Practitioner can persuadeyour creditors to agree to a revised contract, your IVA will end. This will mean you are facing bankruptcy.

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