A Full and Final Settlement IVA is a legally binding arrangement you make with your creditors by which you can clear your debts by repaying a proportion of them in a single lump sum. Normally, this money would either come from a remortgage on your property, or be provided by relatives, but if you are over retirement age, it may be possible to arrange an equity release scheme.

It is an ideal solution if you are able to raise a significant sum of money, but do not have any surplus income.

Your creditors will be likely to agree to a Full and Final Settlement IVA if it can be shown that, by doing so, they stand to receive more than they would if you were made bankrupt.

You start by deciding how much you are able to raise as a payment. (Your advisors will be able to guide you as to what your creditors are likely to find acceptable.) This forms the basis of the IVA proposals document, which is presented to the creditors. A copy is also lodged with the court. If your creditors are already taking action against you, your advisors can apply to the court for an Interim Order, preventing them from pursuing you or your assets without the court's agreement.

The next stage is for a meeting of your creditors to be held at which they will vote on whether to accept, alter or reject your IVA proposals. They are likely to accept as long as you are able to demonstrate a genuine desire to repay as much of your debt as you can afford.

Once a Full and Final Settlement IVA is approved, all interest and charges on your unsecured debt are frozen. And as long as you keep to the agreed terms, the remaining balance of your debt will be written off.