IVA or Individual Voluntary Arrangement can save a person from bankruptcy. An IVA can be defined as a legally binding contract between creditors and debtors. An IVA, which generally lasts for 5 years, makes a debtor free from debts after this period. And in this term, fixed monthly repayments indicating debtor’s available disposable income will be made. Debtors, who have financial support from relatives or have a reliable and regular income, are most suitable for this program. It is supervised by a debt management company. An IVA has various benefits. To begin with, the costs are lower.
All interest and charges on debt are frozen from the day of arrangement. The debtor’s disposable income is taken into account, and thus the repayments are set from that. It has fewer restrictions than bankruptcy. Creditors cannot bring any further charges in the name of debtors, such as bankruptcy. Successful completion of IVA improves the credit rating of the debtors. IVA is not published in local press like bankruptcy and the debtor is not required to inform employers. But it will feature in his credit file. Thus a consumer can find relief from overwhelming debts by a solution called IVA with all its debtor centric benefits.