Debt Solutions — Frequently Asked Questions

Will an IVA affect my credit rating?

Yes. An IVA will remain on your credit file for 6 years from the date it starts. During this time, obtaining credit will be more difficult and expensive. After the IVA is completed and removed from your file, you can begin rebuilding your credit score.

Can I keep my home with an IVA?

In most cases, yes. Unlike bankruptcy, an IVA is specifically designed to help you keep your home. However, in year 5 of the IVA, you may be required to attempt to release equity from your property to increase your contribution. If you cannot release equity, your IVA may be extended by 12 months instead.

Will my employer find out about my IVA?

An IVA is listed on the Individual Insolvency Register, which is a public record. However, your employer is not notified directly. Certain professions (e.g., some financial roles, company directors) may have specific restrictions — check your employment contract.

What happens if I miss an IVA payment?

Missing one payment usually results in a warning. Missing two or more consecutive payments could lead to your IVA being terminated, which may result in bankruptcy. If you’re struggling, contact your Insolvency Practitioner immediately — they can often arrange a payment break or reduced payment temporarily.

How much debt do I need for an IVA?

Most IPs require a minimum of £6,000 in unsecured debt owed to two or more creditors. There’s no maximum, but very high debt levels may make bankruptcy a more appropriate option.

Can I get a DRO if I own a car?

Yes, as long as the vehicle is worth under £2,000. If your car is worth more, you may not qualify for a DRO but could still be eligible for an IVA.

Are these debt solutions free?

The advice and assessment is free. However, formal solutions like IVAs and DROs involve fees:

• IVA fees — Paid by the Insolvency Practitioner from your monthly payments. You don’t pay anything extra on top of your agreed monthly payment.
• DRO fee — £90 one-off fee (can be paid in instalments before the application is submitted).
• DMP — Can be set up for free through charities like StepChange. Commercial DMP providers charge fees.

Free, impartial debt advice is also available from:

• StepChange Debt Charity — stepchange.org.uk — 0800 138 1111
• Citizens Advice — citizensadvice.org.uk
• National Debtline — nationaldebtline.org — 0808 808 4000
• Money Advice Service — moneyadviceservice.org.uk

What’s the difference between secured and unsecured debt?

Unsecured debt is not tied to an asset — credit cards, personal loans, overdrafts, payday loans. These can be included in IVAs, DROs, and DMPs.

Secured debt is tied to an asset — mortgages, secured loans, car finance. These cannot be written off through debt solutions and must continue to be paid separately.

Will all my creditors agree to an IVA?

They don’t all need to agree. As long as creditors representing 75% or more of your total debt vote in favour, the IVA becomes legally binding on all creditors — including those who voted against or didn’t vote at all.

How long does it take to set up an IVA?

From your first call to IVA approval typically takes 4-6 weeks. The process involves:

1. Initial assessment (1-2 days)
2. Financial review and proposal drafting (1-2 weeks)
3. Creditor notification and voting period (2-3 weeks)
4. Approval and implementation (immediate upon approval)

Still have questions? Check your qualification → and an advisor will answer any questions you have on a free, no-obligation call.