Individual Voluntary Arrangements (IVA) are a legally binding contract between you and your unsecured creditors which aims to help you cut your debts to an affordable level and allow you to repay the debt over a fixed period of time, typically 60 months. IVA legislation forms part of the Insolvency Act 1986 and allows you with a realistic alternative of bankruptcy.

There are number of key IVA benefits which you may want to consider when deciding upon a debt solution. These include:

1. Protection from creditor action: An IVA can protect you from your unsecured creditors as they cannot take any legal action to recover the debt once the IVA has been agreed to and you stick to these terms. Once the IVA has been agreed it is legally binding between you and your creditors, so they cannot change their mind.

The only way that a creditor could take further action against you is if you failed to keep to the terms of the IVA agreement, such as by missing payments.

2. Assets are protected: Unlikes bankruptcy, you will not lose control of all of your assets. This means that you should not have to risk losing your home, although you may be required to release some of the equity of your home.

3. Avoid personal bankruptcy consequences: Bankruptcy offers a number of key restrictions which cannot be avoided, but you will be able to avoid some of these with an IVA.

For example, a bankrupt is not allowed to continue in or move to certain positions or sectors of employment. An IVA should not affect your professional status of a debtor.  You should still be able to continue with your professional practice and can even hold public office.

Bankruptcy is a very public process and details about your bankruptcy will be publicly advertised. However, an IVA is a private agreement between your and your unsecured creditors. There is no publicity in the local newspaper about this, although your details will be available on a government website.