An Individual Voluntary Arrangement (IVA) is a formal agreement between someone who owes money (the debtor) and the people he or she owes money to (creditors). An IVA proposal sets out how the debtor is going to repay the creditors, usually over a period of five years.

With an IVA you agree with people you owe money to that you'll only pay what you can afford. That means a single payment each month over the five year period. People you owe money to agree to write off the debt you can't afford to repay and leave you alone.

To be eligible for an IVA you'll need to be genuinely struggling to make your repayments. Your debt will also need to be over £15,000 and owed to three or more creditors, but you can find out more by talking to a debt counsellor.

As your creditors will need you to make monthly payments, you'll need to be in regular employment too.

Find out more about IVAs - Find out more about IVAs on the Think Money website here

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