[John Smith]

An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors where you will come to an arrangement with people you owe money to, to make reduced payments towards the total amount of your debt in order to pay off a percentage of what you owe then generally after some years your debt is classed as settled.

Due to its formal nature, an Individual Voluntary Arrangement (IVA) has to be set up by a licensed professional

Once a decision has been made that an Individual Voluntary Arrangement (IVA) is right for you, you will be asked questions regarding your current financial situation. Based on the information you have given, a repayment amount will be agreed with you. Once proposals have been drawn up you will need to check and sign these and return them to your IP.

An application may then be made to the court for an Interim Order. Once this is in place, no creditors will be able to take legal action against you. A creditor meeting will be arranged to which you should attend.

For an Individual Voluntary Arrangement (IVA) to be approved, creditors will be called upon to vote either for or against the arrangement. If only one creditor votes "for" the Individual Voluntary Arrangement (IVA), the Individual Voluntary Arrangement (IVA) will be approved. However, if only one creditor votes against the Individual Voluntary Arrangement (IVA) and they represent less than 25% of your total debt, the meeting will be suspended for a later date and other creditors who did not vote will be called upon for their vote.

If the creditor who voted against the Individual Voluntary Arrangement (IVA) represents more than 25% of the total debt you owe the Individual Voluntary Arrangement (IVA) will fail. This is because an Individual Voluntary Arrangement (IVA) will only ever be approved if 75% in monetary value is voted for. If any of the creditors don't vote, it is assumed that they will vote FOR the Individual Voluntary Arrangement (IVA).

The Individual Voluntary Arrangement (IVA) will be legally binding. As long as you keep up the repayments, when the term of your agreement is finished, you will be free from these debts regardless of how much has been paid off.

During the period of your arrangement your financial situation will be reviewed regularly to see if there has been any change in your circumstances.