Government IVA Plans

The government has announced it will unveil plans enabling people to make simple individual voluntary arrangements (IVAs).

Simple IVAs will make the application process quicker for those looking for an alternative to bankruptcy as well as allowing more people to apply for a debt repayment programme.

It is believed that the level of debt that debtors have to be responsible for will be reduced from 75 per cent to 51 per cent, for those owing less than £75,000, reports This is Money.

However, plans have been rejected for automatic approval for all those applying for an IVA with debts of less than £25,000.

An IVA sees debtors making an agreement with creditors that usually sees them wiping out a part of the dept – up to 65 pence in the pound – in return for a regular monthly repayment.

It is seen by most as a more flexible and less restrictive option than bankruptcy. The government plans are expected to be announced later this month.

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