If you are entangled in the meshes of debt then you can opt for debt consolidation through Individual Voluntary Arrangement (IVA) to avoid bankruptcy or any extreme debt help solution. An IVA is a legally binding arrangement that is usually supervised by a licensed insolvency practitioner. The purpose of an IVA is to facilitate you to reach an agreement with your creditors that will avoid you from opting for bankruptcy. Usually, for your creditors to accept the conditions you have requested, that is to reduce your debt, you have to offer a larger amount of payment to them, than what they would have received in case you file for bankruptcy.

How and when can you use IVA?

The best part about an IVA is that is a legally binding contract, unlike the informal debt management programs being offered commonly. This is a regulated process; hence you have to comply with the agreements once both the parties have decided on them. IVA is for use to all kinds of individuals under debt, be it single traders, business partners or even a working person under debt. An IVA is especially an appropriate option for you if you own property and would not like to lose it, in the event of a bankruptcy.

How does IVA work?

Since IVA is a legal procedure, you would need various documents and follow a set method to go about it. Initially you have to draft a proposal for your creditors which will be reviewed by a licensed insolvency practitioner before submitting them to the court and then to the creditors. The court will then issue an Interim Order, which would prevent all creditors from taking any action against you. Then a meeting will be arranged between you and your creditors by the court, where both the parties will decide if the proposal is accepted or not. Following the issuance of the Interim Order you would need to provide a number of legal documents, your proposals and details of your debt situation. Your proposal will only be accepted if 75% of the creditors present or by proxy vote in the favor of your proposal. Once the IVA is agreed upon, a supervisor is appointed, usually the insolvency practitioner who makes sure that the proposals are adhered to and distributes the dividends among the creditors.

Thus you can see how IVA can be an effective way of getting you out of debt. Please visit http://www.debtconsolidationcare.com for more information on debt.