An IVA is a contract an individual sets up, with the help of an insolvency practitioner, in order to make payments towards their outstanding debts over a fixed period of time. The debtor calculates how much of their debt they can afford to repay monthly and offers this amount to the creditors. As long as 75% (of debt value) of the creditors agree to the offer, it becomes binding on all the creditors. There are specific criteria you must meet in order to qualify for an IVA. Speak to a free debt advisor who will be able to assess your circumstances and advise you on IVA’s and other appropriate options as it is unlikely someone with less than £15,000 of debt could do an IVA.

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