It is no secret that more and more consumers are finding themselves having trouble with debt, and that many of them will end up being unable to pay their bills. Rates of debt have been rising for a number of years now, and with wages not keeping pace with expenses in many places around the country that trend is only likely to rise.

Many people find themselves in the uncomfortable position of borrowing money just to meet current living expenses like food and clothing, and this can be further exacerbated if those funds come from high interest sources such as credit cards. For many people who find themselves unable to keep up with their bills, an individual voluntary arrangement, or IVA, may be the best option for all involved.

In essence, an individual voluntary arrangement (IVA) allows a consumer to create a plan for repaying his or her creditors. This plan is then submitted to the creditors, and they have the ability to vote yes or no on the proposed plan. If 75% of the consumer's creditors agree to the individual voluntary arrangement, it is adopted. While the exact amounts vary, the adoption of an IVA can result in a 50-95% reduction in the amount of money that is owed. The alternative to the individual voluntary arrangement (IVA) is generally a payment to the preferred creditors. In such a plan, unsecured creditors generally receive no money at all.

If 75% of the consumer's creditors are unable to agree on the individual voluntary arrangement (IVA), any creditors whose debt amounts to 750 pounds or more is able to apply for the bankruptcy of the individual consumer. All these creditors are then allowed to take court action in the county court judgement.

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