Unlike bankruptcy, an Individual Voluntary Arrangement lets you manage debt without exposing your financial struggles to public scrutiny. With an IVA, you create a legally binding agreement with your creditors, committing to repay debts over a specific period—typically five years—at a manageable rate that suits your financial situation. Only you, the company managing your IVA, and the involved creditors know about your financial circumstances, ensuring that your situation remains private and out of the public eye. This level of confidentiality helps you preserve your peace of mind and protects both your personal and professional reputation.

An IVA also impacts your daily life far less severely than bankruptcy. While bankruptcy might force you to lose assets, limit your career options, and even close your bank accounts, an IVA lets you retain more control. You can usually keep your job since most employers don’t penalize employees who enter IVAs. Additionally, you can often keep your standard bank accounts during the IVA period, avoiding the hassle of opening a basic bank account as bankruptcy might require. An IVA ultimately provides a more flexible and balanced approach to resolving debt, allowing you to safeguard your employment, financial access, and personal privacy.

Advantages

• Only pay what you can afford
• No publicity
• Keep your current account(s)
• Write off a large percentage of your debt
• Legally binding

Disadvantages

• At least 75% of creditors must agree.
• IVAs usually last for 5 years
• Your home can still be at risk if your creditors decide not to exclude them
• The IVA could well affect your credit rating
• If you do not keep to the agreement, the IVA will fail and you can still be made bankrupt. If this happens, the costs of the IVA will be added to your debts

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