As an increasing amount of people face ever-mounting debt, some have started to consider individual voluntary arrangements (IVAs) as a way of avoiding bankruptcy. First created in the 80s to help businesses avoid bankruptcy, they are now also available to individuals who are unable to solve their financial problems. To avoid falling into bankruptcy, borrowers can set up an individual voluntary arrangement with their creditor(s). The agreement consists of organizing the return payment either over time or immediately of the owed sum in return for the debt to be written off. Payments can be made either in one lump sum or monthly at a minimum of around $300 a month for a period of a maximum of five years. The reason so many people are setting up IVAs every year is down to the huge benefits that can be had if you are finding it difficult paying back your debts. Once you enter into an agreement, all interest and late payment charges are frozen for the duration of the agreement, plus you are unable to be taken to court by your creditors and once the full amount of the debt is received by your creditors, your credit rating will improve. If you are looking at possibly bankruptcy due to large debts from credit cards, overdrafts, personal and business loans, store cards and catalogue negative balances then an IVA could be your best option for continued solvency. As long as you can either afford a single lump sum or monthly payments of a minimum of $300, then you may be able to reduce your debt by up to 75%. An IVA must be proposed by an insolvency practitioner to your creditors on your behalf. Charges for insolvency practitioners differ, but it is common for fees to be taken from the monthly payments that you make if that is how you choose to settle your debt. Before committing to any one insolvency practitioner, always search the internet for recommendations and speak to friends or family to find a reputable practitioner as the last thing you need in this situation is to lose money. $20,000 is commonly the minimum amount of debt you need in order to qualify for an IVA. The most important point to consider is that 75% of your creditors, that is, the creditors that own 75 per cent of your debt, must agree to the terms negotiated in the individual voluntary arrangement; if fewer than 75% agree, then you will have to consider other alternatives to protecting your solvency. If the remaining 25% do not agree, they are legally bound to the arrangement anyway.