IVA Frequently Asked Questions (FAQ)

IVA Frequently Asked Questions

Find quick answers to common questions about Individual Voluntary Arrangements. Questions are organized by topic.

General IVA Questions

What is an IVA?

An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement between you and your creditors to repay your debts over a fixed period (typically 5-6 years). After completion, remaining qualifying debt is written off.

Read full IVA guide →

How does an IVA work?

You work with a licensed Insolvency Practitioner (IP) to create a proposal outlining affordable monthly payments. If 75% of your creditors (by debt value) approve, you make payments for 5-6 years, then remaining debt is written off.

See IVA process →

Who is eligible for an IVA?

To qualify, you typically need:

  • £6,000+ unsecured debt
  • Regular income
  • Ability to pay £80-100+ monthly
  • Live in England, Wales, or Northern Ireland
  • 2+ creditors

Check your eligibility →

How much debt do you need for an IVA?

The typical minimum is £6,000 in unsecured debt. Below this, fees make IVAs uneconomical. There's no upper limit, though IVAs typically handle debts up to £75,000-£100,000.

Can I get an IVA with less than £6,000 debt?

It's unlikely. Most Insolvency Practitioners won't accept IVAs below £6,000 because fees would consume too much of payments. Consider a Debt Management Plan instead.

How long does an IVA last?

Standard duration: 5-6 years (60-72 months)

  • Most IVAs: 60 months (5 years)
  • If equity release fails: Extended to 72 months (6 years)
  • Early completion possible with lump sum payment

IVA Eligibility Questions

Can I get an IVA if I'm unemployed?

Generally no. IVAs require regular income to make monthly payments. If you're unemployed, consider:

  • Debt Relief Order (if debts under £30,000)
  • Bankruptcy
  • Wait until employed and reconsider

Can I get an IVA if I'm self-employed?

Yes! Self-employed individuals can get IVAs. You'll need to provide:

  • 6+ months of trading history
  • Accounts or tax returns
  • Bank statements
  • Evidence of consistent income

IVAs allow self-employed people to continue trading, unlike bankruptcy.

Can I get an IVA if I'm on benefits?

It depends which benefits:

May be acceptable:

  • Disability benefits (PIP, DLA)
  • Carer's Allowance
  • Employment + benefits
  • Working Tax Credits

Usually not acceptable alone:

  • Jobseeker's Allowance
  • Universal Credit (basic rate)
  • Income Support
  • ESA only

Can I get an IVA if I rent my home?

Yes! Being a renter doesn't disqualify you. In fact, it simplifies the process as there's no equity release requirement in year 5.

Can I include my partner's debts in my IVA?

No. Only debts in your name (or joint names) can be included in your IVA. Your partner would need their own separate IVA for their individual debts.

Can I get an IVA with a CCJ?

Yes! Having a County Court Judgment doesn't prevent IVA eligibility. In fact, an IVA stops further court action and includes CCJ debts.

Can I get an IVA in Scotland?

No. IVAs are not available in Scotland. Scottish residents should consider:

  • Trust Deed: Scottish equivalent of IVA
  • Debt Arrangement Scheme (DAS): Protected debt repayment program
  • Bankruptcy (Scottish "Sequestration")

IVA Process Questions

How do I start an IVA?

  1. Contact a licensed Insolvency Practitioner
  2. Free initial consultation
  3. Provide financial information
  4. IP prepares proposal
  5. Proposal sent to creditors
  6. Creditors vote
  7. If approved (75%+), IVA begins

Detailed process guide →

How long does it take to set up an IVA?

Typical timeline: 6-12 weeks

  • Week 1-2: Initial consultation and information gathering
  • Week 3-6: Proposal preparation
  • Week 7-9: Creditors' meeting and voting
  • Week 10+: IVA begins after approval

Delays can occur if information is incomplete or creditors request modifications.

Do I have to go to court for an IVA?

No. IVAs don't involve court. Everything is handled by your Insolvency Practitioner and creditors. Creditors' meetings are virtual (no physical attendance required).

What happens at a creditors' meeting?

You don't attend! The meeting is virtual:

  • Creditors receive proposal 14 days before
  • They vote by post/email/online
  • Meeting conducted by your IP
  • 75% (by debt value) must approve
  • Results sent to you after

What if creditors reject my IVA?

If rejected, you can:

  • Modify proposal and resubmit
  • Offer higher monthly payments
  • Include lump sum
  • Consider bankruptcy
  • Try Debt Management Plan
  • Negotiate directly with creditors

Your IP will advise on next steps.

Can creditors make me pay more in an IVA?

During proposal: Creditors can request modifications (higher payments, longer term). You must agree to any changes.

After approval: Creditors cannot demand more unless your circumstances change and annual review shows increased income.

IVA Payments Questions

How much will my IVA payments be?

Payments are based on disposable income:

Monthly Income
MINUS Essential Expenditure
= Disposable Income (your IVA payment)

Typical payments: £80-£500/month depending on circumstances.

Calculate your payment →

Can I afford an IVA?

If you have £80-£100+ left after essential expenses each month, you can likely afford an IVA. Your IP will assess affordability based on your full financial situation.

What if I can't afford my IVA payments?

If you genuinely can't afford payments:

Temporary issues:

  • Request payment break (usually 1-3 months)
  • Provide evidence of hardship
  • Resume payments after

Permanent reduction:

  • Annual review can reduce payments
  • Must show reduced income/increased expenses
  • Extension of term may be required

Unable to continue:

  • IVA may fail
  • All fees paid are kept
  • Creditors can pursue you again
  • Bankruptcy may follow

Can my IVA payments go up?

Yes, during annual reviews if:

  • Your income increases
  • Essential expenses decrease
  • You haven't disclosed income
  • Circumstances improve

Cannot increase if:

  • Circumstances unchanged
  • Expenses increased justifiably
  • Income reduced

Can I pay off my IVA early?

Yes! You can complete early by:

  • Paying lump sum to settle remaining debt
  • Usually need to pay 100% of remaining debt
  • Requires creditor approval
  • Your IP arranges this

Common sources: Inheritance, property sale, gift from family

What happens if I miss an IVA payment?

One missed payment:

  • Contact IP immediately
  • Explain reason
  • Arrange to catch up
  • Usually no serious consequences

Multiple missed payments:

  • IVA at risk of failure
  • IP may terminate IVA
  • Creditors can pursue you again
  • May petition for bankruptcy

Always contact your IP before missing payments.

IVA Restrictions Questions

Can I get credit during an IVA?

Cannot borrow over £500 without IP permission

Reality: Even with permission, lenders rarely approve credit during an IVA. Your credit rating is severely damaged.

Alternatives:

  • Prepaid cards (use own money)
  • Authorized overdraft (with IP permission)
  • Borrow under £500 (still requires permission)

Can I have a bank account during an IVA?

Yes! You keep your bank account unless:

  • The bank is also a creditor (may freeze account)
  • You switch to different bank to avoid issues

Basic bank accounts are available if needed. These don't allow overdrafts.

Can I get a mortgage during an IVA?

Extremely difficult. Most lenders won't approve mortgages during IVAs.

If approved (very rare):

  • Specialist lenders only
  • Very high interest rates (10%+)
  • Large deposits required (40%+)
  • May affect IVA compliance

Better to: Wait until after IVA completion (or 1-2 years after).

Can I go on holiday during an IVA?

Yes, but consider:

  • Must maintain IVA payments
  • Holiday must be affordable within budget
  • Cannot borrow to fund holiday
  • Reasonable holidays are acceptable

Excessive spending: May affect IVA if creditors become aware

Best practice: Budget for modest holidays from disposable income.

Can I get a mobile phone contract during an IVA?

Difficult but possible:

  • SIM-only contracts easier (no phone)
  • Phone contracts harder (£500+ credit)
  • Need IP permission if includes expensive phone
  • May need to pay upfront or use PAYG

Can I move house during an IVA?

Yes, but must:

  • Inform your IP immediately
  • Ensure new rent is affordable
  • Any rental deposit needs IP approval if reduces payments
  • Moving costs must be reasonable

Buying property: Very difficult during IVA (see mortgage question above).

IVA and Assets Questions

Will I lose my home in an IVA?

Usually no. IVAs are designed to protect homes. However:

Year 5 requirement:

  • Must attempt to release equity (remortgage)
  • If successful: Equity goes to IVA, completes early/on time
  • If unsuccessful: Extend IVA by 12 months

Rarely lose home unless:

  • Cannot maintain mortgage payments
  • Voluntarily sell
  • Breach IVA terms

Will I lose my car in an IVA?

Usually no. Cars are typically protected if:

  • Reasonable value (up to £2,000-£5,000)
  • Essential for work
  • Only household vehicle
  • Not a luxury vehicle

May need to downgrade if:

  • Luxury or high-value vehicle
  • Not essential
  • IP considers excessive

What assets can I keep in an IVA?

Generally keep:

  • Your home (with equity release requirements)
  • Reasonable car
  • Household furniture and belongings
  • Tools of trade
  • Essential items
  • Pensions

May need to sell:

  • Second properties
  • Expensive jewelry
  • Luxury items
  • Collections with significant value
  • Non-essential vehicles

What about my pension in an IVA?

Pensions are protected. They're not considered assets in IVAs and cannot be accessed by creditors.

However: If you're receiving pension income, it counts toward your IVA payment calculations.

Can I save money during an IVA?

Limited savings allowed:

  • Small emergency fund (£500-£1,000) usually acceptable
  • Savings for specific purposes (Christmas, car repairs)
  • Must be reasonable and disclosed

Large savings: May indicate you can afford higher IVA payments.

What about an inheritance during my IVA?

Inheritances are windfalls and must be disclosed:

  • Usually must contribute to IVA
  • Often 100% goes to IVA
  • Can complete IVA early
  • Requires creditor agreement

Small inheritances (under £500): Case-by-case basis.

IVA Impact Questions

How does an IVA affect my credit rating?

Severe negative impact:

  • IVA recorded on credit file
  • Stays for 6 years from start date
  • Credit score drops significantly
  • Difficult to get credit for 6+ years

Detailed credit impact →

Will my employer find out about my IVA?

Probably not, unless:

  • You tell them
  • They check Insolvency Register
  • Your profession requires disclosure
  • You work in financial services

No automatic notification to employers.

Can I be a company director with an IVA?

Usually yes, but check:

  • Your company's Articles of Association
  • Some restrict directors with IVAs
  • Professional body rules (if applicable)
  • Ongoing ability to fulfill duties

Much better than bankruptcy (which automatically disqualifies directors).

Does an IVA affect my partner?

Your partner is NOT affected unless:

  • You have joint debts (they remain fully liable)
  • Their income is considered in your IVA affordability
  • You own property jointly (may affect equity release)

Their credit file: Completely separate, not affected.

Will an IVA affect my job?

Most jobs unaffected. Restrictions mainly for:

  • Financial services roles
  • Some police roles
  • Armed forces (may be discharged)
  • Certain professional bodies
  • Roles with financial responsibility

Check: Your employment contract and professional body rules.

Can I be refused an IVA?

Yes, creditors can reject if:

  • Offer is too low
  • They'd get more from bankruptcy
  • Information is incomplete
  • Terms are unreasonable
  • You don't meet basic criteria

Typical approval rate: 85-95% of properly prepared proposals are approved.

IVA Completion Questions

What happens when my IVA is completed?

Upon successful completion:

  1. Final payment made
  2. IP distributes to creditors
  3. Completion certificate issued
  4. Remaining debt legally written off
  5. IVA ends

Your obligations end and you're debt-free (for included debts).

How do I get my IVA completion certificate?

Your IP issues this automatically after:

  • All payments made
  • Any equity release completed
  • Final distribution to creditors
  • Usually within 6-8 weeks of final payment

Keep this safe - proof of completion.

How long after completion does IVA leave my credit file?

6 years from START date, not completion date.

Example:

  • IVA starts: January 2020
  • IVA completes: January 2025 (5 years)
  • Removed from credit file: January 2026 (6 years from start)

What debts are written off in an IVA?

Included and written off:

  • Credit cards
  • Personal loans
  • Overdrafts
  • Store cards
  • Payday loans
  • Catalogue debt
  • Some HMRC debts

NOT written off:

  • Secured debts (mortgage, car finance)
  • Student loans
  • Court fines
  • Child maintenance
  • Debts obtained fraudulently
  • Debts not disclosed in proposal

Can I get credit after my IVA?

Immediately after: Still difficult as IVA on credit file

After 6 years: IVA removed, credit improves

Timeline:

  • Years 0-6: IVA on file, very difficult
  • Years 6-8: IVA removed, gradual improvement
  • Years 8+: Credit normalizing

Credit recovery guide →

IVA Failure Questions

What happens if my IVA fails?

Consequences of IVA failure:

  • All fees paid are kept (not refunded)
  • No debt is written off
  • Creditors can pursue you again
  • May face bankruptcy petition
  • Legal protection ends

Common reasons for failure:

  • Missing multiple payments
  • Not disclosing income
  • Breaching IVA terms
  • Getting credit without permission

Can I get another IVA if my first one fails?

Yes, you can apply for a new IVA, but:

  • Must address reasons for first failure
  • Creditors may be skeptical
  • May require better terms
  • Not guaranteed approval

Better: Do everything to make first IVA succeed.

What percentage of IVAs fail?

Approximately 25-30% of IVAs fail before completion. Main reasons:

  • Job loss
  • Illness
  • Relationship breakdown
  • Non-compliance

Success rate: 70-75% successfully complete.

IVA vs. Other Solutions Questions

IVA vs. bankruptcy - which is better?

Depends on circumstances:

IVA better if:

  • You own a home
  • You have assets to protect
  • You're self-employed or a director
  • You have regular income

Bankruptcy better if:

  • Few/no assets
  • Low/no income
  • Need quick solution (12 months vs 5-6 years)
  • Can pay £680 upfront

Detailed comparison →

IVA vs. DMP - which should I choose?

IVA advantages:

  • Legal protection from creditors
  • Debt write-off after term
  • Cannot be canceled by creditors

DMP advantages:

  • More flexible
  • No legal commitment
  • Can pay off early without creditor approval
  • Less credit impact

Detailed comparison →

What is a Debt Relief Order? Is it better than an IVA?

DRO is for those with:

  • Debts under £30,000
  • Less than £75 monthly surplus income
  • Assets under £2,000
  • Costs only £90

DRO is better if you qualify (lower cost, quicker). But most with £6,000+ debt and regular income won't qualify.

IVA vs DRO comparison →

IVA Costs and Fees Questions

How much does an IVA cost?

Total typical cost: £5,000-£8,000 over the IVA term

Breakdown:

  • Nominee fee: £1,000-£2,000 (setup)
  • Supervisor fee: 15-20% of each payment (ongoing)

Important: Fees are built into your monthly payment, not charged separately.

Detailed fee breakdown →

Do I pay upfront for an IVA?

No. Unlike bankruptcy (£680 upfront), IVAs have:

  • £0 upfront cost
  • Fees taken from your monthly payments
  • First 10-15 months typically cover nominee fee
  • Then supervisor fee from each payment

Are IVA fees refundable if it fails?

No. If your IVA fails:

  • All fees paid are kept by the IP
  • They've done work preparing and managing
  • No refunds or partial refunds
  • This is why completing your IVA is crucial

Why are IVA fees so high?

Fees cover:

  • Initial consultation and assessment
  • Proposal preparation
  • Creditors' meeting organization
  • 5-6 years of annual reviews
  • Distributing payments to creditors
  • Dealing with creditor queries
  • Compliance monitoring
  • Final completion work

Regulated: Fees must be "fair and reasonable" and approved by creditors.

Getting Help Questions

Where can I get free IVA advice?

Free debt advice services:

  • StepChange: 0800 138 1111
  • National Debtline: 0808 808 4000
  • Citizens Advice: Local bureau
  • Money Helper: 0800 138 7777

These charities provide free, impartial advice.

How do I find a licensed Insolvency Practitioner?

Official IP locator:

  • Gov.uk IP finder
  • Search by location
  • All are licensed and regulated
  • Check their regulatory body

Tips:

  • Consult 2-3 different IPs
  • Compare fees and services
  • Check reviews
  • Ensure they're licensed

Can IVA Facts set up my IVA?

No. IVA Facts is an information website. We:

  • ❌ Cannot set up IVAs
  • ❌ Are not licensed Insolvency Practitioners
  • ❌ Don't provide financial advice

We provide free information to help you understand IVAs. You must contact a licensed IP to actually set up an IVA.

Is IVA advice free?

Initial consultations: Usually free from IPs

Full advice: Free from debt charities (StepChange, National Debtline, etc.)

Paid advice: Some financial advisors charge, but free options exist

IVA setup fees: Built into your payments (not extra cost)

Still Have Questions?

More Resources

Contact Free Debt Advice

For personalized answers to your questions:

  • StepChange: 0800 138 1111
  • National Debtline: 0808 808 4000
  • Citizens Advice: Find your local bureau
  • Money Helper: 0800 138 7777

Remember: IVA Facts provides information only, not advice. Always consult licensed professionals before making debt-related decisions.

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