The strength of the Individual Voluntary Arrangement (IVA) procedure is that it recognises that individuals may have more debt than they can reasonably be expected to repay and that a binding agreement to repay only a proportion of that debt is in the best interests of all concerned.

At its simplest, an IVA is a contract between you and your creditors. This contract allows you to make an offer to all of your creditors in full settlement of your debts. When your IVA proposal is accepted by creditors you will have the security of knowing that you have no further liability other than to ensure that you stick to the offer that you made to creditors in your proposal. Therefore, you can be confident that the IVA provides a real solution to your debt problems.

"Creditors will generally be prepared to accept an IVA proposal provided the offer made demonstrates that you are making a genuine attempt to repay as much as you can reasonably manage."

As each IVA contract is individual, the offer made to creditors will depend entirely upon what assets you own and on what you can reasonably afford to pay.


You should be open and honest about your financial circumstances. Creditors will expect the amount of money they recover from the IVA to be at least as good as under bankruptcy so it is important that you should put forward the best offer you can to creditors in the proposal.

The IVA Procedure

The basis of the IVA procedure is the Proposal document. This document sets out in detail your full circumstances and the offer of payment that you are able to make to your creditors in order to satisfy your debts.


Your Proposal is circulated to your creditors and filed with your local County Court. The power of the IVA procedure derives from its legal basis, which gives you an assurance that, once entered into, all of your creditors are bound by its terms. Therefore you do not have to worry that your creditors will ignore the IVA and take legal action against you.

Your proposal is then considered by your creditors who have the opportunity to vote to accept or reject your offer. Provided a sufficient majority accept your proposal (currently 75% by value of those creditors voting) the proposal is approved and becomes binding upon you and all of your creditors.