An Individual Voluntary Arrangement (IVA) is an alternative to bankruptcy, it provides someone who is insolvent with a means of avoiding bankruptcy.

You are only able to propose an IVA if you are insolvent, which generally means that you are unable to pay your debts as and when they fall due. So from the information you have provided abive an IVA would not be an option that the law would allow.

However many of the Debt Advice Foundation’s callers do tend to say the same as yourself. “I haven’t missed a payment” If those payments have been made at the expense of your priority debts, or by using money that should have been set aside for those priorities that only arise quarterly or annually (insurances or utilities perhaps) then it may be that if the household budget is brought back into the right order of payment priority then the it may well illustrate that you are in fact insolvent.

I would advise speaking to an experienced debt adviser as soon as possible, they will be able to define this and also address any concerns over your vehicle and phone contracts. There is nothing to say that you cannot have vehicles and mobiles in an IVA but you will need to justify why they are needed and that the cost or value is reasonable. As far as costs of the IVA are concerned, in the vast majority of cases these are paid for by the creditors themselves and you would have an outline of all of these before the IVA was proposed.

This question was answered by Debt Advice Foundation, an independent UK debt advice charity. If you're considering entering into an IVA, Debt Advice Foundation provides a free, confidential helpline and can advise you on whether you qualify. Click here to find out more.

You are best to speak to a specialist regarding IVAs to make sure they can give you the correct advice. Please see out 'Top Debt Advisors' on the homepage who provide free advice, such as The Debt Advice Foundation Click here to find out more or CAP UK.

An IVA is for people who are behind on their repayments and have no hope of paying their debts in full. Taking out an IVA will adversely affect your credit rating and should not be entered into on a whim. The IVA provider will charge fees which will be deducted before payment is passed on to your creditors. The best thing will be to seek free debt advice as to whether an IVA or any other option is best for you.

See TOP Debt Advisors on the homepage for free advice from the specialists.