What is an IVA?

Understanding Individual Voluntary Arrangements

An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement between you and your creditors to pay back your debts over a set period, typically 5-6 years. It's one of several debt solutions available in England, Wales, and Northern Ireland.

How an IVA Works

When you enter an IVA:

  1. You work with a licensed Insolvency Practitioner (IP) who helps you create a proposal
  2. Your IP calculates what you can realistically afford to pay each month
  3. The proposal is sent to your creditors for approval
  4. If 75% (by debt value) of voting creditors agree, the IVA is approved and binds all creditors
  5. You make one monthly payment to your IP, who distributes it to your creditors
  6. After completing the agreement (usually 5-6 years), remaining qualifying debt is written off

Key Features of an IVA

  • Legally binding: Protects you from creditor action once approved
  • Fixed term: Typically 60-72 months
  • Affordable payments: Based on your disposable income
  • Interest frozen: Creditors cannot add more interest or charges
  • Debt write-off: Remaining debt is written off after completion
  • One monthly payment: Simplified debt management

Explore IVA Topics

Pros and Cons

Understand the advantages and disadvantages of an IVA to make an informed decision.

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Eligibility Criteria

Find out if you meet the requirements for an IVA, including minimum debt thresholds.

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Costs and Fees

Learn about the costs involved, including nominee and supervisor fees.

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Credit Score Impact

Understand how an IVA affects your credit file and how to rebuild afterward.

Credit Impact →

Consequences

Learn about the impact on your home equity, career, and lifestyle.

View Consequences →

Who Should Consider an IVA?

An IVA may be suitable if you:

  • Have unsecured debts of £6,000 or more
  • Have a regular income (employed or self-employed)
  • Can afford at least £80-100 per month towards your debts
  • Want to avoid bankruptcy
  • Own a home and want to protect it
  • Are struggling with unmanageable debt repayments

Who Should NOT Consider an IVA?

An IVA may not be appropriate if you:

  • Have debts below £6,000
  • Have no regular income
  • Cannot afford minimum monthly payments
  • Need a short-term solution (IVAs last 5-6 years)
  • Have mostly secured debts (mortgages, car finance)

Next Steps

Ready to learn more? Explore our detailed guides: