An Individual Voluntary Arrangement is a legally binding agreement between you and your creditors. The arrangement will normally last 5 years and during this period, you will pay what you can afford outside reasonable living costs. An IVA has to be set up by a licensed insolvency practitioner (IP).
The purpose of an arrangement is to help those in financial difficulties to make a formal proposal to settle their unsecured debt. All interest and charges will be frozen and creditors will be prohibited from demanding additional payments. Monthly payments are based on what you can afford. This payment will be pre calculated before any agreement takes place and can vary during the 5 years depending on your income and expenditure. Once the final payment is made, any outstanding debt is written off. The arrangement can write off more than 70% of your unsecured debt. The IVA will be legally binding. As long as you keep up the repayments, you will be free from these debts regardless of how much has been paid off.
You should always seek professional Individual Voluntary Arrangement Advice consultant. Once you decide that an IVA is right for you, you will be required to undertake an assessment regarding your current financial situation. Based on correct and completed information you have given, a repayment amount will be calculated. Your practitioner will call up a creditors meeting, where they will be called upon to vote either for or against the arrangement. Once the IVA is accepted, the practitioner will ensure that the terms and conditions that were agreed to at the creditors meeting are properly adhered to. He will also monitor the IVAs progress.
You are responsible to pay the agreed payments to the IP, who will then ensure that these payments are distributed to all creditors until the successful completion of the IVA. It is in your own interest to maintain their payments, as failure to pay will almost certainly result in the failure of the IVA. Once the IVA is successfully completed, you will be considered debt free. Any outstanding balances are written off.
If you can, then you should get Individual Voluntary Arrangement Advice, because you have an agreement with your creditors to make a single reduced payment each month, which will last for a sensible period of time (normally 5 years). Once agreed, creditors are not allowed to add further interest or charges to your accounts.
Learn more about individual voluntary arrangement, debt management, what is a debt management plan at https://www.ivaonline.co.uk/iva.html