An Individual Voluntary Arrangement (IVA) is a legally binding arrangement between you and your creditors that is drawn up by a qualified insolvency practitioner (usually an accountant).

You must agree to pay money as a lump sum, installments or both.

You will often have to pay the insolvency practitioner before you can set up an IVA

Your creditors may write off part of the debt and not take court action against you or make you bankrupt.

You have to pay all the costs and fees and also a large amount of the debt, so an IVA is realistic only if you have a fair amount of spare money or things you can sell to pay off your debts.

If you are considering this option, you should shop around to compare insolvency practitioners’ advice and charges.

Remember that the insolvency practitioner will not necessarily act in your best interests; they are businesses that need to make a profit. It is therefore important to get independent advice before signing an IVA