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The Individual Voluntary Arrangement (known as an IVA) was Introduced as an alternative to bankruptcy by the Insolvency Act of 1986.

1. The idea of an IVA is to enable people in financial difficulties to come to a formal agreement with their creditors rather than going down the bankruptcy route.

Unlike a debt management plan, an IVA is a legally binding agreement which is supervised by a Licensed Insolvency Practitioner.

An IVA is seen as a more effective option than bankruptcy from both the debtor's and creditor's perspective. There are no fees or legal proceedings involved with an IVA, unlike with bankruptcy. Furthermore, from the creditor's point of view, an IVA offers a Higher repayment of the debt than would otherwise be Gained if the debtor were made bankrupt.

1. As an IVA is highly regulated it is unlikely to be open to abuse by those offering I debt mangement services.
2. An IVA doesn't affect your professional status or ability to hold public office
3. With an IVA you only pay back a percentage of your debts
4. While an IVA is in place, it is illegal for your creditors to bother you- and they normally do not contact you during this time
5. An IVA enables you to have a regular bank account but you cannot have an overdraft facility
6. Your interest is frozen which means that your debt won't keep growing

An IVA can benefit anyone who is experiencing debt problems- particularly those who Have assets ,especially property which they would risk losing if they were to be made bankrupt.