The advantages of an Individual Voluntary Arrangement IVA include:

• The lack of stigma or publicity attached to bankruptcy.
• If the client runs a company, it can continue to trade and provide income to fund the IVA.
• An IVA can be drawn up to meet the client’s situation, so that assets such as the family home can be excluded so long as the creditors agree — eg, because overall they will be better off than in bankruptcy.
• Creditors should receive higher payments than they would in a bankruptcy.
• Unsecured creditors who voted against the IVA will still be bound by it.
• The client is not subject to the restrictions imposed on bankruptcy and so can still be a company director and obtain credit for the business.
• One reduced monthly payment to your creditors.
• A court order will stop any legal action by your creditors.
• Telephone calls and letters from your creditors will stop.
• Interest and charges are stopped, so the spiral of debt is halted.
• Fixed repayment method (normally 5 years) at the end of which all your debts are discharged.
• All unsecured creditors, to whom the IVA proposal is sent, are bound by the arrangement, even if they do not agree to the proposal, providing 75% of your remaining creditors in value agree to the proposal.
• Unlike bankruptcy, details of an IVA are not openly published: it is a confidential arrangement between you and your creditors. Employers and landlords are not informed.