What is a Full and Final Settlement IVA?

A “Full and Final” Settlement IVA (Individual Voluntary Arrangement), while similar in idea to a regular IVA, is carried out much differently. A “Full and Final Settlement” IVA is often called a “Lump Sum IVA” because it involves one lump sum payment that covers all pre-existing debts owed and legally clears the debtor of further obligation to those creditors.

In order to qualify, one must meet the regular IVA qualifications, owing more than £10000 to more than three creditors and having financial difficulties and a low disposable income (your total income with reasonable costs of living, including any new loans, subtracted from the total). The Full and Final Settlement IVA is legally binding and all debts will be settled after the one payment.

But what if you don’t have the lump sum necessary for a Full and Final Settlement IVA readily available right now? If you own property, you can release some of the equity through a secured loan. You’ll prevent yourself from making five years of payments through a regular IVA, paying so many fees to the Insolvency Practitioner in charge of your case, and help rid yourself of your overhanging debts after only one payment.