Individual Voluntary Arrangements - How do They Work?

An individual voluntary arrangement (IVA) will cause your creditors to stop harassing you for payments and will stop interest from accruing on unsecured debts such as credit cards. Creditors will have to agree to the terms of the IVA in order to be included in the payments. Most creditors are reasonable enough to understand that a person is entering into an IVA because of an inability to pay debts. They will agree to the IVA because they realize that it may be the only way that they are going to get any money. Once they have agreed upon the IVA, they are bound by its terms and are forbidden from contacting you or asking for any additional money above the monthly amount that you are paying.

In many cases, an IVA does not involve paying all creditors in full. The goal is to reach a final settlement for an agreed-upon amount, over a set period of time. Your income and monthly expenses will determine the amount of your monthly payment and duration of the IVA. The payment amount will be set to allow enough money for you to cover all of your living expenses without enduring undue hardship.

Many people who choose to enter into an IVA do so because they have mortgages to pay as well as other obligations. An IVA will allow you to continue to make your mortgage payments and meet your other obligations while freezing your credit cards to stop interest from accruing while you are paying them off.

With an IVA, you will not be forced to sell your house, and you and your family will be allowed enough money to live on. You will have peace of mind, knowing that you are bringing your debts back under control.