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An Individual Voluntary Agreement (IVA) consolidates your debts together into one affordable payment.

It prevents creditors from contacting you for payment, or taking legal action while you’re in an IVA (with some exceptions).

An IVA is usually fixed for 5 years, and any remaining balances are written off at the end of your IVA, including interest and charges.

Although an IVA is legally binding, it is flexible, so payments can be adjusted if your circumstances change, providing your creditors agree.

An IVA is recorded on your credit file for at least 6 years and on the Public Insolvency Register which could alert people to your insolvency and affect your credit rating.

If your circumstances change, and creditors no longer agree to an alternative repayment arrangement, your IVA may fail which means the creditors can petition for your bankruptcy.

If your circumstances change, and creditors no longer agree to an alternative repayment arrangement, your IVA may fail which means the creditors can petition for your bankruptcy.

Your bank might close your account and you’ll need to open a new one, or they may downgrade you to a basic account. You should be able to open a basic bank account if this happens.

Some immigration applications can be affected by insolvency.

There are costs involved with arranging an IVA and these can be as much as £5,000.

Most debts can be included with the exception of:

• Maintenance Arrears

• Child support arrears

• Student loans

• Magistrates Court Fines

• TV Licence arrears

• Fraudulent debts

Citizens Advice cannot offer IVAs as they have to be set up by a qualified Insolvency Practitioner.

To discuss this option further and to understand how this may affect you, please speak to an IVA provider.