Individual Voluntary Arrangements

What are they?

Individual Voluntary Arrangements or IVAs (England, Wales and Northern Ireland) are formal and legally binding contracts with your creditors that restructure your debt repayments over a fixed term. Once all of you payments have been made, any remaining debt is completely written off. Once an IVA has been agreed, your creditors are no longer allowed to contact you provided you maintain your repayments.

How do they work?

First of all, your monthly household income is evidenced by payslips, contracts, benefit awards or company accounts. We then know precisely how much money comes into a household each month.
We then calculate your expenditure. Certain items of your expenditure are easily evidenced. Your monthly mortgage or rent payment can be proved with a statement or contract. The same is true for things like your car insurance and mobile phone bills. For other items, creditors use pre-agreed guidelines for the things that you have to spend money on each month like transport and food. Using a combination of evidenced items and guideline amounts, your monthly expenditure can be easily and fairly calculated.
We should also point out here that guidelines are precisely that and are not hard and fast rules. There are many people who have unique circumstances which can be taken into consideration. It is simply a case of understanding and communicating them correctly to your creditors.