An IVA is a formal, legally binding agreement between you and your creditors to repay part of your debts, usually over five years. A licensed insolvency practitioner sets it up and runs it. If you complete the IVA, the remaining qualifying debt is usually written off. If it fails, you could end up bankrupt.
Free debt advice is available : MoneyHelper, StepChange, National Debtline and Citizens Advice all give free debt advice. Please speak to one of them before you decide. An IVA is a long commitment.
We can help you understand how an IVA works and explain other debt solutions that may be available, depending on your circumstances.
If you need advice about whether an IVA is right for you, we recommend seeking appropriate independent debt advice before making a decision.
You speak to us, or to a free adviser, about whether an IVA could suit you
A licensed insolvency practitioner reviews your income, spending and debts and works out what you can afford to pay each month.
The practitioner writes a proposal for your creditors
Creditors who vote and hold at least 75% of the debt, by value, must agree. If they say no, the IVA doesn’t go ahead.
You pay one monthly amount to the practitioner, who pays fees and shares the rest between your creditors. It usually runs for five years, and the practitioner supervises it throughout
Licensed insolvency practitioners are regulated by a professional body. You can check one on the Insolvency Service’s register.
However,If you can’t keep up with payments
Tell your practitioner straight away your circumstances change, they can review the plan. If payments can’t continue, the IVA may fail, and creditors can then ask for you to be made bankrupt.
However,If your IVA has already failed, read our guide to what happens next.
An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement between you and your creditors to repay a portion of your debts over a set period, usually five to six years. Any remaining debt at the end is legally written off.
An IVA is a private arrangement that allows you to retain assets such as your home in most cases, while bankruptcy is a court process that can have more severe consequences. It is often preferred for people with property or certain types of employment.
IVA is typically suitable for people with unsecured debts of £10,000 or more owed to two or more creditors, with a regular income that allows for a monthly contribution. Your advisor will assess your eligibility during the consultation.
For most people, an IVA does not affect employment. However, certain professions such as solicitors, accountants, and financial services roles may have restrictions. We advise checking your employment contract or professional body rules.
In most cases, you can keep your home during an IVA. However, you may be required to attempt to release equity from your property in the final year of the arrangement. Your advisor will explain this in detail.
Once an IVA is approved by creditors and the court, they are legally bound by its terms and cannot take further action against you for the included debts.
If your circumstances change, your IVA supervisor can review and adjust the plan. In serious cases where payments cannot continue, the IVA may fail. It is important to communicate any changes promptly to avoid this.
If your IVA has already failed, you can read our guide on what happens next and the options available to you.
No. A licensed insolvency practitioner does. We explain how they work and your other options