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

Feature	Details
Debt write-off	Up to 80% of unsecured debt can be written off
Duration	Typically 60 months (5 years), sometimes 72
Monthly payment	Based on what you can afford after living expenses
Legal protection	Creditors cannot pursue you or take court action
Interest frozen	All interest and charges are frozen from the approval date
Home protection	Your home is usually protected (unlike bankruptcy)

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

Solution	Debt Write-Off	Duration	Home at Risk?	Credit Impact
IVA	Up to 80%	5-6 years	No	6 years
DMP	None (repay in full)	Until repaid	No	Ongoing
DRO	All (after 1 year)	1 year	No	6 years
Bankruptcy	Most debts	1 year discharge	Yes	6 years

How to Apply for an IVA

Complete our free assessment — Answer a few questions about your situation
Speak to an advisor — We’ll match you with a licensed Insolvency Practitioner
Proposal drafted — Your IP creates a proposal tailored to your finances
Creditor vote — Creditors vote on the proposal (75% must agree)
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 →

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