Individual Voluntary Arrangement

What is an IVA?
An IVA, or individual voluntary arrangement, is a legally binding agreement between you and your creditors, in which you agree to pay an affordable monthly payment for a set period of time – usually 5 or 6 years. After this set period of time any remaining debt will be written off. Your credit file could be affected for 6 years.

Will an IVA cause me to lose my home?
While it is possible, it’s not very probable. Regulations state that if you have equity, some form of equity release may be required by creditors. If you do not have equity and can’t re-mortgage, more times than not, you will have an extra 12 months of payments added on to your IVA.

How will an IVA affect you?
When you enter an IVA, your creditor accepts what you can afford to pay over the course of 5 years. Once that time period is up, your outstanding balance is written off. This amount could be up to 75% of your initial debt balance.

Your ability to obtain credit for credit cards, loans, mortgages and other unsecured debts may be affected for 6 years. An IVA will be on your credit report for a minimum of 6 years from the date of arrangement and longer if the arrangement lasts more than 6 years.

Your IVA will be added to the Insolvency Register and is removed 3 months after the IVA ends.

Who can set up an IVA?
An IVA can only be set up by a professional lawyer or accountant, known as an Insolvency Practitioner (IP).

If we determine that an IVA is a suitable option for you and you agree, we will refer you to a third party associate firm at which time the fees will be explained to you. We will always recommend you speak to The Money Advice Service for free & impartial money advice before requesting to be referred for an IVA.

What happens during an IVA?
An IVA involves making a profile of your financial status and making contact with all of your creditors. As the proposal is being processed, you will be provided with an interim order which can prevent creditors from seeking further action. During a meeting with all of your creditors, your proposed monthly payment will be voted on. As long as 75% of your creditors agree upon the amount you proposed, your IVA will be approved (this is distributed based upon your debt level with each creditor). The proceeds from one payment sent to your insolvency practitioner each month will then be divided among your creditors.


  • Give you a date on which your debt will be cleared.
  • Stop letters and phone calls from your creditors.
  • Stop debt collectors and bailiffs from calling you.


  • You will be tied into the agreement for the full term.
  • Your details will be recorded on the insolvency register.
  • You will not be able to get additional credit of more than £500 without your supervisor’s consent.
  • Homeowners will need to look into releasing equity from their home.
  • Failure to comply with the IVA may lead to bankruptcy.
  • Your credit file may be affected for six years.
  • Certain debts will still be outstanding.