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What is an IVA?

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An Individual Voluntary Arrangement (IVA) is a formal way to deal with debt. It’s an agreement between you and the people you owe money to. You make affordable monthly payments for a set period—usually five or six years.

A qualified expert, called an Insolvency Practitioner, handles the process. They speak to your creditors and manage everything for you.

You only pay what you can afford. Once the IVA ends, any remaining debt included in the agreement is written off.

Who can get an IVA?

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An IVA might be right for you if:

• You owe money to two or more creditors

• You’re struggling to make your monthly payments

• You have a regular income

Every situation is different, so it’s important to get proper advice. We offer free, straightforward guidance to help you decide if an IVA is the right step.

It only takes a few minutes to check if you qualify. No pressure, no jargon—just honest help when you need it.

Are You Feeling Overwhelmed by Your Current Debts? Get Debt Advice:

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Looking for a Way to Pay Off Debt Without Losing Your Home?

If you’re struggling with debt and worried about going bankrupt or losing your home, an Individual Voluntary Arrangement (IVA) could be the right choice for you.

An IVA is a legal agreement between you and the people you owe money to (your creditors). It helps you pay off your unsecured debts in a way that you can afford. You’ll make monthly payments based on what you can manage, usually over 5 to 6 years. After this time, any remaining debt is written off.

An IVA can:

• Stop your home from being repossessed

• Protect you from legal action by creditors

• Help you rebuild your credit score over time

If you keep to the agreed plan, an IVA gives you a clear and structured way to get your finances back on track—without the stress of bankruptcy.

Before considering an IVA, it is crucial to seek expert advice to determine if it is the most suitable option for your financial situation. A qualified Insolvency Practitioner (IP) can assess your circumstances and guide you through the entire process, ensuring you make informed decisions and regain control of your finances.

See How We Can Instantly Help You with Affordable Monthly Payments:

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By reducing your debt payments to a minimum of £70 per month, we can:

• Stop your creditors from contacting you or taking action against you.
• Allow you to keep your car and stay in your home.
• Stop all interest and charges instantly.
• Provide a way to become debt-free after five or six years.

Just make your payment every month for 60 months, and at the end of the term, all of your debt balances are written off completely.

Do I Qualify for an IVA?

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To qualify for an IVA you should:

• Have £5000 or more in debt?
• Have 2 or more creditors?
• Have a regular income? (If you are self-employed, check your accountancy for regular earnings.)
• Are willing to pay £70 or more towards all of your debts? If you can answer YES to the above, then you could be likely to qualify for an IVA. If you decide to apply for an IVA, your credit file/credit rating may be impacted, and your details will appear on the Insolvency Register (although this isn’t advertised).

What Unsecured Debts Can I Put Into an IVA?

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Generally speaking, all of your unsecured debts will be included in an IVA. The most common include:

• Credit cards such as those with HSBC, Natwest, Barclaycard, Vanquis, Asda, Virgin, Capital One.
• Payday loans such as Lending Stream, QuickQuid, Drafty, Cashfloat, Satsuma.
• Overdraft debts with your current bank account or your previous bank account.
• Unsecured loans.
• HMRC debts.
• Council tax debts/council tax arrears.
• Bailiff debts such as Moorcroft Group, Lowell, PRA Group, Advantis, Opos, Cabot Financial, Resolve Call,  DCBL, PDCS and more.

For your IVA (Individual Voluntary Arrangement) to go ahead, at least 75% of your voting creditors (the companies you owe money to) must say yes. These are the creditors who decide whether your IVA gets accepted.

To help with this, your IVA provider will run a credit check. This shows details of your credit agreements, including things like:

• Secured loans

• Mortgages

• Credit cards

• Payday loans

But your IVA must include all of your unsecured debts, even ones that don’t show up on your credit report. Once the IVA is approved, it’s hard to add any extra debts, so it’s important to share every detail of your debt now.

This way, your IVA company can explain all your options clearly and set up the best plan for your situation.

It may not include any court fines, student loans, council tax arrears, child support arrears, previous individual voluntary arrangements, or parking charge notices that may need to be included in your IVA.

What Debts Can’t Go into an IVA?

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✔ Mortgage arrears – unless you have left the property.

✔ Rent arrears – unless your landlord agrees to the proposal.

✔ Debts from secured loans.

✔ Guarantor loan debts.

✔ Hire purchase debt.

✔ Child maintenance arrears/child support arrears.

✔ Other secured debts are not allowed in an IVA.

✔ Court fines.

✔ Very low debt value/debt values.

✔ Arrears from insurance policy and insurance policies.

✔ Debt charity donations.

✔ National insurance debt.

✔ Limited Company debt.

✔ Student loans.

How Do I Apply for an IVA (UK) with an Insolvency Practitioner?

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Interested in how you can set up an IVA? Here is the process:

Consider all of the pros and cons and decide whether you should apply for an IVA.

Use our free IVA payment calculator – it’ll run you through the basic qualifying criteria and let you know if you’re eligible. One of our friendly advisors will review your debts and provide you with free advice to determine if an IVA is the best option for you.

We’ll help you create an IVA proposal to formally apply for an arrangement.

Voluntary arrangements are formalised, and you make one low payment into your IVA every month to licensed insolvency practitioners in the UK. At the end of the 60 months, the remainder of your debt will be written off in full, and your IVA will be complete.

What Information Do I Need for an IVA?

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When you first get started, you won’t need to provide anything. The purpose of the initial call is to get a feel for your debt situation and to point you in the right direction.

An IVA isn’t always the most suitable option, and you may be guided towards a debt charity, such as the Money Advice Trust, Money Advice Service, or the Citizens Advice Bureau for debt advice. You will not always be recommended a formal debt solution.

If you are recommended an IVA, you may be in touch with a member of the Insolvency Practitioners Association (IPA) or a company which is authorised by the Financial Conduct Authority (FCA).

But at present, IVA companies do not need to register with the FCA, as they are not responsible for regulating IVAs.

If you do decide to apply, here’s what you’ll need to provide:

• Payslips: 3 months’ payslips will be requested to provide proof to the Insolvency Practitioner of your earnings. If you’re not employed, then evidence will be needed for how you receive your income. This is important as we’ll need to prove that you can maintain payments towards your debts for the 5-year term. Your payslip should clearly show your full name and national insurance number. This also gives the Insolvency Practitioner an opportunity to check your employment status.
• Bank statements: 3 months’ statements are needed to show all of your outgoing payments. Online statements are usually fine, as long as they clearly display your sort code and account name alongside your name and address.
• Proof of identification: A driving license or passport is fine here. Sometimes you can use a National Insurance document if you do not have a driving license or passport. You can provide a copy of this by post, WhatsApp, or through email.

You’ll be able to go through all of the document requirements in more detail at your free telephone insolvency appointment, so don’t worry if you think you may struggle to provide one of the above.

IVA Costs and Fees

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When you start an Individual Voluntary Arrangement (IVA), it’s important to know about the fees involved. While an IVA can help reduce and write off a large part of your debt, there are some costs for setting it up and managing it.

The first cost is the Nominee’s fee. This is paid to the Insolvency Practitioner (IP) who helps set up your IVA. They will prepare your proposal and speak to your creditors to try to get it approved. This fee usually ranges from £1,000 to £2,000, depending on how complex your situation is.

Then there’s the Supervisor’s fee. This is also paid to the Insolvency Practitioner, but it covers the ongoing work of managing your IVA over the years. This includes collecting your payments and paying your creditors. The Supervisor’s fee is usually between 15% and 20% of the payments you make.

There are also disbursements, which are smaller costs like postage, paperwork, and other admin expenses. These can add up to around £1,000 to £2,000 during the course of your IVA.

You don’t pay these fees separately or upfront. Instead, they are taken from the monthly payments you agree to make into your IVA. This means your payments go towards both your debt and the fees, with nothing extra added on top.

Working with an Insolvency Practitioner

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An Insolvency Practitioner (IP) plays a crucial role in setting up and managing an IVA. The IP is responsible for guiding you through the entire process, ensuring that the IVA is the best debt solution for your financial situation.

The IP will start by assessing your financial situation to determine if an IVA is suitable for you. They will review your income, expenses, and debts to create a realistic and affordable IVA proposal. This proposal outlines how much you can afford to pay each month and how the remaining debt will be handled.

Once the IVA proposal is drafted, the IP will present it to your creditors and negotiate the terms of the arrangement. They will work to get the proposal approved by at least 75% of your voting creditors. If approved, the IP will manage the IVA over its lifespan, collecting your monthly payments and distributing them to your creditors.

Throughout the IVA, the IP will review and update the arrangement as necessary to ensure it remains affordable and effective. They will also provide ongoing support and advice to help you stay on track with your payments.

When working with an IP, it’s essential to ensure they are authorised and regulated by a professional body, such as the Insolvency Practitioners Association (IPA) or the Financial Conduct Authority (FCA). This ensures that you receive professional and ethical service throughout the IVA process.

IVA and Creditors

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An IVA is a legally binding agreement between you and your creditors, designed to provide a fair and affordable way for you to repay your debts while protecting your assets.

Creditors play a crucial role in the IVA process. They must agree to the terms of the arrangement, including the monthly payments and the amount of debt to be written off. For the IVA to be approved, at least 75% of voting creditors must agree to the proposal. This means that the majority of your creditors need to be on board for the IVA to proceed.

Creditors benefit from an IVA as it provides a structured and predictable way for them to recover a portion of the debt owed to them. Instead of dealing with multiple, potentially unreliable payments, creditors receive a single, consolidated payment each month, managed by the Insolvency Practitioner.

Creditors also have rights within the IVA process. They have the right to reject the IVA proposal or request changes to the terms of the arrangement. This ensures that the IVA is fair and reasonable for both parties.

By understanding the role and rights of creditors, you can better appreciate the collaborative nature of an IVA and how it can provide a mutually beneficial solution for managing your debts.

Living with an IVA

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Living with an IVA requires discipline and commitment, but the benefits far outweigh the challenges. Here are some essential things to consider:

Firstly, you must make regular monthly payments into the IVA, as agreed upon in the proposal. These payments are based on what you can afford, ensuring that they are manageable within your budget.

Budgeting is crucial when living with an IVA. You must stick to a budget and avoid taking on new debt during the IVA term. This may require making lifestyle changes, such as reducing non-essential expenses and finding ways to save money.

An IVA can affect your credit rating, making it more challenging to obtain credit in the future. However, as you make consistent and responsible payments, your credit rating can improve over time. The IVA will remain on your credit file for six years, but the long-term benefits of becoming debt-free are worth the temporary impact on your credit rating.

Despite these challenges, the benefits of an IVA are significant. With an IVA, you can write off a substantial portion of your debt, make affordable monthly payments, and protect your assets. By the end of the IVA term, you will be in a much stronger financial position, with the remaining debts written off and a clearer path to a debt-free future.

By understanding the costs and fees involved, working with an authorised Insolvency Practitioner, and being aware of the creditors’ role and rights, you can make an informed decision about whether an IVA is the right debt solution for you.

IVA or Bankruptcy?

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Bankruptcy and IVAs both deal with insolvency issues and are both legally binding formal debt solutions, but they work in different ways. With bankruptcy, your home could be repossessed and your assets seized. Plus, your bank accounts would be frozen, and deductions may be taken from your future earnings if you become bankrupt.

Bankruptcy also costs a fee of around £800 and is publicly advertised. However, some people find that bankruptcy may have a negative effect on their trade and employment.

But with an IVA:

• You’ll be allowed to stay in your home and can usually keep your car.
• An IVA is not publicly advertised.
• In most situations, an IVA won’t affect your employment.
• You don’t pay any upfront costs when you set up your IVA.
• You pay affordable payments based purely on your income and expenditure.
• You’ll usually be able to continue using your bank account.

Getting Started with an IVA

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With growing charges and the high rates of interest on unsecured debt, it’s always best to tackle your debt problems head-on, before they get out of control. Often the best way to do this is with a structured, legally-binding agreement like a debt IVA.

And if you’re struggling to make monthly repayments on your debt, it’s important to seek independent debt advice as soon as you can.

Testimonials

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