Individual Voluntary Agreement (IVA) The IVA creates a legally binding contract between an individual and his creditors, whereby the creditors agree to accept a reduced payment in full and final settlement of their claims. An IVA can be used by sole traders, or anyone with credit card and personal loan debts. The benefit of the IVA is that it is extremely flexible and can be based upon a single lump sum payment, for instance by way of a remortgage, accident compensation or inheritance. Alternatively the debtor can agree to pay monthly instalments for a set period of time, usually about five years. The debtor’s proposal is put to a meeting of their creditors, who are entitled to vote to accept or reject the offer. Provided that 75% in value of those who attend and vote agree, then the arrangement is binding on all.