IVA — Individual Voluntary Arrangement

An IVA is a legally binding arrangement between individuals and their creditors that forms part of the 1986 Insolvency Act. It is for people who can no longer afford to make their monthly repayments to their creditors in full, but can afford to make a reasonable offer. The IVA has to be supervised by a Licensed Insolvency Practitioner, the purpose of which is to enable an individual, sole trader or Partner ("the Debtor") to reach a compromise with his creditors and 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 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.