Individual Voluntary Arrangement (IVA)

An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement between you and your creditors that allows you to repay a portion of your debts over a fixed period — typically 5 to 6 years. At the end of the arrangement, any remaining unsecured debt is legally written off.

How an IVA Works

An IVA is set up by a licensed Insolvency Practitioner (IP). They assess your financial situation, calculate what you can realistically afford to pay each month, and propose a repayment plan to your creditors. If creditors representing at least 75% of your total debt agree, the IVA becomes legally binding on all of them — even those who voted against it.

Key Features

Do I Qualify for an IVA?

You may qualify for an IVA if:

• You have over £6,000 in unsecured debt
• You owe money to two or more creditors
• You have a regular income and can afford monthly payments
• You are a resident of England, Wales, or Northern Ireland (Scotland has a similar scheme called a Trust Deed)

Common debts included in an IVA:

• Credit cards
• Personal loans
• Overdrafts
• Catalogue and store cards
• Payday loans
• Council tax arrears (in some cases)
• Utility bills (in some cases)

Debts NOT included in an IVA:

• Mortgages (secured debts)
• Student loans
• Court fines
• Child support / maintenance

How Much Could Be Written Off?

The amount written off depends on your circumstances — your income, essential expenses, total debt, and what your creditors will accept. Some IVAs see 50% written off, others up to 80%. The average is around 60%.

Example Scenario

• Total unsecured debt: £20,000
• Affordable monthly payment: £200
• IVA duration: 60 months
• Total paid into IVA: £12,000 (£200 × 60)
• Debt written off: £8,000 (40%)

This is an illustrative example. Your actual figures will depend on your individual circumstances.

Advantages of an IVA

• Fixed end date — You know exactly when you’ll be debt-free
• Single monthly payment — No more juggling multiple creditors
• Legal protection — Stops creditor calls, letters, and court action
• Interest frozen — Your debt stops growing
• Home protected — You won’t lose your home (unlike bankruptcy)
• Debt written off — Remaining unsecured debt is legally eliminated at the end

Disadvantages of an IVA

• Credit rating impact — An IVA stays on your credit file for 6 years
• Public record — Your IVA appears on the Individual Insolvency Register
• Must maintain payments — Missing payments could lead to IVA failure and bankruptcy
• Asset release — You may need to release equity from your home in year 5
• Fees — IP fees are taken from your monthly payments (already factored in)

IVA vs Other Debt Solutions

How to Apply for an IVA

1. Complete our free assessment — Answer a few questions about your situation
2. Speak to an advisor — We’ll match you with a licensed Insolvency Practitioner
3. Proposal drafted — Your IP creates a proposal tailored to your finances
4. Creditor vote — Creditors vote on the proposal (75% must agree)
5. IVA begins — Once approved, you make one affordable monthly payment

The entire process typically takes 4-6 weeks from your first call.

Find out if an IVA is right for you. Use the form above or check your qualification now →

Important Risk Warnings

An IVA is a formal, legally binding agreement. Before proceeding, you should understand:

• An IVA will affect your credit rating for 6 years during the arrangement
• Fees apply — typically £3,000-£5,000, paid from your monthly contributions
• If you own your home, home equity may be at risk — you may need to remortgage in year 4
• If the IVA fails, you may be made bankrupt
• Free, impartial debt advice is available from MoneyHelper (moneyhelper.org.uk, 0800 138 7777), StepChange (stepchange.org, 0800 138 1111), and Citizens Advice (citizensadvice.org.uk)

This is not a recommendation. Whether an IVA is suitable depends on your individual circumstances. Always seek free, impartial debt advice before committing to any debt solution.