An IVA, or Individual Voluntary Arrangement, is legally recognised and arranged through a licensed insolvency practitioner for people with serious debt and insolvency issues.

IVAs introduced in 1987 to help people with chronic debt problems avoid bankruptcy. They are suitable for people with at least £12,000 of unsecured debts and a regular income.

If creditors representing 75% or more of the debt vote in favour of the proposal, the IVA goes ahead.

Under the terms of the arrangement, a large percentage of the overall debt can be written off and the rest is paid off in monthly instalments over five years (60 months).