IVA Monthly Payment Calculator - Estimate Your IVA Payments

IVA Monthly Payment Calculator

Calculate your potential IVA monthly payment using our free calculator. This tool estimates your disposable income and shows what you'd likely pay each month in an Individual Voluntary Arrangement.

Understanding Your IVA Payment

What is Disposable Income?

Your disposable income is what's left after you've paid all your essential living expenses. This is the amount available to pay your creditors through an IVA.

Formula:

Total Monthly Income
MINUS Essential Expenses
= Disposable Income (Your IVA Payment)

What Counts as Essential Expenses?

IVA payments are based on reasonable allowances for essential spending:

✅ Always Allowed:

• Mortgage or rent
• Council tax
• Utilities (gas, electric, water)
• Food and housekeeping
• Transport to work
• Essential insurance
• Childcare costs
• Medical necessities
• Phone/internet (reasonable)

⚠️ Sometimes Allowed:

• Gym memberships (if medical need)
• Charitable donations (small amounts)
• School trips (reasonable amounts)
• Pet food (essential pets only)

❌ Not Usually Allowed:

• Credit card payments
• Loan repayments (unless secured)
• Luxury expenses
• Holidays
• Entertainment subscriptions
• High-end phone contracts

Household Size Guidelines

Your household size affects your allowances:

Single Person:

• Food & housekeeping: £200-£350/month typical
• Higher in London

Couple:

• Food & housekeeping: £400-£550/month typical

With Children:

• Additional £70-£100 per child for food
• School meals, uniforms, activities allowed

Minimum IVA Payment

Most IVA providers require:

• Minimum: £80-£100 per month
• Typical: £150-£250 per month
• No maximum: Based on affordability

Below £80-£100? IVA may not be suitable. Consider:

• Debt Relief Order (DRO)
• Debt Management Plan (DMP)
• Bankruptcy

Annual Payment Reviews

Your IVA payment isn't fixed forever:

Annual Reviews:

• Conducted every 12 months
• Income and expenses reassessed
• Payment may increase or decrease
• Based on current circumstances

Payment Increases If:

• Income increases significantly
• Expenses decrease
• Household changes reduce costs

Payment Decreases If:

• Income reduces
• Essential expenses increase
• New dependents

Typical scenarios:

• Promotion → Payment may increase 50% of income rise
• Redundancy → Payment may reduce or pause
• New baby → Payment may reduce

Example Calculations

Example 1: Typical IVA Payment

Income:

• Employment: £1,800/month
• Total income: £1,800

Expenses:

• Rent: £650
• Council tax: £110
• Utilities: £120
• Food: £250
• Transport: £150
• Insurance: £40
• Phone: £30
• Total expenses: £1,350

Calculation:

£1,800 - £1,350 = £450 disposable income
Proposed IVA payment: £450/month ✅

Result: Suitable for IVA. Payment is above minimum and affordable.

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Example 2: Low Disposable Income

Income:

• Employment: £1,200/month
• Benefits: £300
• Total income: £1,500

Expenses:

• Rent: £550
• Council tax: £100
• Utilities: £110
• Food: £280
• Transport: £120
• Other: £280
• Total expenses: £1,440

Calculation:

£1,500 - £1,440 = £60 disposable income

Result: ❌ Below IVA minimum (£80-£100). Consider DRO instead.

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Example 3: High Income, High Payment

Income:

• Employment: £3,200/month
• Total income: £3,200

Expenses:

• Mortgage: £850
• Council tax: £150
• Utilities: £140
• Food: £400
• Transport: £200
• Insurance: £80
• Childcare: £600
• Other: £180
• Total expenses: £2,600

Calculation:

£3,200 - £2,600 = £600 disposable income
Proposed IVA payment: £600/month ✅

Result: Suitable for IVA. High payment but affordable and will clear debt faster.

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Example 4: Couple with Children

Income:

• Person 1: £1,600/month
• Person 2: £900/month
• Child benefit: £150
• Total income: £2,650

Expenses:

• Mortgage: £700
• Council tax: £130
• Utilities: £160
• Food: £500 (family of 4)
• Transport: £180
• Insurance: £60
• Childcare: £400
• Other: £220
• Total expenses: £2,350

Calculation:

£2,650 - £2,350 = £300 disposable income

Note: Only the person with debts enters IVA. If both have debts, both can enter individual IVAs.

Result: £300/month payment suitable ✅

Factors That Affect Your Payment

1. Income Changes

During IVA:

• Payrise → Payment likely increases
• Bonus/overtime → May need to contribute part
• New job → Payment reassessed
• Redundancy → Payment reduces or pauses

2. Expense Changes

Increases allowed:

• Utility price rises
• Council tax increases
• Rent increases
• Transport cost rises
• New essential expenses

Decreases:

• Mortgage reduction → Payment increases
• Children leave home → Payment may increase
• Lower rent → Payment increases

3. Household Changes

Payment may reduce:

• New baby
• Partner loses job
• Dependents move in
• Caring responsibilities

Payment may increase:

• Partner gets job
• Children become independent
• Shared expenses reduce

4. Windfall Policy

Lump sums during IVA:

• Inheritance, bonuses, tax refunds typically go to IVA
• Small windfall (under £500) may keep
• Large windfall may end IVA early
• Each case assessed individually

Payment Protection

If You Can't Afford Payment

Options:

• Payment break: 1-3 months (extends IVA)
• Payment reduction: If circumstances change
• Variation: Modify IVA terms (needs creditor approval)
• Failure: Last resort (debts return)

Payment Flexibility

Limited flexibility:

• Can request payment changes at annual review
• Can request payment break for emergencies
• Cannot simply reduce payments yourself

Unlike DMP:

• DMP allows flexible changes anytime
• IVA requires IP approval
• IVA is legally binding

Comparing Monthly Payments

IVA vs Other Solutions

IVA:

• Payment: £150/month typical
• Duration: 60 months
• Total paid: £9,000
• Debt written off: Yes ✅

DMP:

• Payment: £150/month
• Duration: 180 months (if £27k debt)
• Total paid: £27,000
• Debt written off: No ❌

DRO:

• Payment: £0/month
• Duration: 12 months
• Total paid: £90 (application)
• Debt written off: Yes ✅

Bankruptcy:

• Payment: Variable based on income
• Duration: 36 months payments
• Total paid: £680 + payments
• Debt written off: Yes ✅

Common Questions

Q: Is my IVA payment fixed for 5-6 years?
A: No. It's reviewed annually and can change based on your circumstances.

Q: What if my income increases?
A: Your payment typically increases by 50% of the net income rise. Example: £100/month payrise = £50/month IVA increase.

Q: Can I make extra payments to finish faster?
A: Not usually beneficial. Speak to your IP about early settlement if you get a lump sum.

Q: What if I lose my job during the IVA?
A: Contact your IP immediately. Payments can be reduced or paused. IVA can be extended.

Q: Are bonuses included in IVA payments?
A: Usually yes. Typically 50% of net bonus goes to IVA.

Q: Can I increase voluntary expenses to reduce my payment?
A: No. Your IP uses standard expense guidelines. Excessive expenses won't be accepted.

Q: What's included in "reasonable" living expenses?
A: IPs use Standard Financial Statement (SFS) guidelines based on household size and location.

Q: Does my partner's income affect my IVA payment?
A: Only for shared household expenses. Your partner's income isn't included directly unless joint IVA.

Next Steps

1. Check Full Eligibility

Your payment amount is just one factor. Check if you meet all IVA criteria:

IVA Eligibility Calculator →

2. Understand IVA Costs

Your monthly payment includes fees. Understand the full cost:

IVA Cost Breakdown Tool →

3. Compare Solutions

See if IVA is better than alternatives for your situation:

Debt Solution Comparator →

4. Get Professional Advice

Speak to debt advisors for personalized assessment:

Free Advice:

• StepChange: 0800 138 1111
• National Debtline: 0808 808 4000
• Citizens Advice: Local bureau

Licensed IPs (for IVA quotes):

• Compare 2-3 different providers
• Check FCA authorization
• Get fee breakdown in writing

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Remember: This calculator provides estimates only. Your actual IVA payment will be determined by a licensed Insolvency Practitioner based on detailed assessment of your income, expenses, and circumstances.

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