If you are struggling to pay your debts agreeing an affordable payment plan with those you owe money to is a sensible way forward. There are two ways you can do this through an informal or formal arrangement.
Informal Agreement
An informal agreement involves either yourself or a third party agreeing a plan with your creditors,
it tends to be used when the amount owed is low, there are only a few creditors and debt can be paid back in full over a relatively short period of time. It does not however provide you with the protection of a formal agreement.
Individual Voluntary Agreement (IVA)
An IVA is a formal agreement and is effectively a contract between you and the your creditors.
It ring fences any historic debt allowing you to make contributions towards the debt at an agreed and affordable level over a set timescale.
To be approved an IVA requires the agreement of 75% (in value) of creditors which vote upon it. It also allows for the orderly realisation of assets by the debtor.
