What is an IVA?

Debt Solutions

Other IVA FAQ

IVA Information

An IVA is a legally binding contractual arrangement supervised by a Insolvency Practitioner, the purpose of which is to enable an individual, sole trader or Partner ("the Debtor") to reach a compromise with creditors to avoid the consequences of bankruptcy. The compromise should offer a larger repayment towards the creditor’s debt than could otherwise be expected were the Debtor to be made bankrupt. This is measured with a statement showing the returns each solution may give to a creditor.

This is often facilitated by the Debtor making contributions to the arrangement from his income over a designated period or from a third party contribution or other source that would not ordinarily be available to a Trustee in Bankruptcy. It may also include a payment from equity in property in the fourth year of an arrangement.

Unlike the unregulated informal debt management products, an IVA is legally binding and precludes all creditors notified and therefore included in the IVA from taking any enforcement action against the Debtor post-agreement assuming the Debtor complies with the his obligations in the IVA.

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