An Individual Voluntary Arrangement (IVA) is a type of debt management plan that can assist those struggling with unmanageable debts. Debt is becoming a bigger and bigger problem across the UK. And homeowners are bracing themselves for an estimated 50% rise in repossessions in 2008 as over a million people's fixed-rate mortgage deals come to an end and more expensive variable rates kick in.

IVA – The debt management solution

The good news for debtors is that a new code of conduct has been agreed so that those entering into an IVA can now expect slightly increased protection. It has taken months of fighting by trade bodies on behalf of the debt management companies that provide IVAs. The trade bodies have been wrangling with the banks and creditors who once upon a time often rejected IVAs as a matter of routing. The new code of conduct will help those who take on an IVA to deal with debt.

IVA – How does it work?

An IVA works successfully when the lender agrees to write off a proportion of the debt in exchange for set monthly repayments over five years. But the problem came when IVA proposals were rejected by the banks. Previously banks set their rates exceedingly high and IVA companies argued over the high rates – the banks defended those rates and in some cases they would reject the IVA proposal. This can be devastating for the debtor, resulting in repossession or bankruptcy.

But now, the IVA will be a more protected way forward for those managing debts. From February 1st, the new code of conduct includes the stipulations:

• There will be a standardised financial statement on a debtor's outgoings and income.
• If lenders reject an IVA, they will have to give specific reasons for justifying their action.

The Debt Resolution Forum behind the reforms told the press: "From February the man on the street will be able to be confident that, if he goes to an IVA practitioner that has signed up to these standards, he will be guaranteed that IVA will go through."

As well as the new code of conduct, the fees associated with IVAs have come down.

Varden Nuttall has been established for over 15 years and is dedicated to helping people in financial difficulty find a debt management solution through an Individual Voluntary Arrangement (IVA). Employing 90 people, including trained and skilled IVA administrators, we are one of the largest IVA companies in the UK and handle over 3% of all IVA applications. To find out more about the company, or to make an appointment to talk about putting an IVA in place, call us today on 0800 031 9802 or fill in our online enquiry form.