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What is a Individual Voluntary Arrangement (IVA)?

An IVA is a detailed and legally binding payment proposal to repay your debt. Our IVA team help you draft the proposals and when agreed these are sent to your creditors for them to consider. The terms of the IVA depend on what you and your creditors are likely to agree.

Generally IVA’s are based on affordable monthly payments for a 5 or 6 year period. After this period any remaining debt included in the IVA will be “written off” by the creditors once all payments have been made.

If you have a property it is expected that your proposal will include the refinancing of your property in the final year of the IVA. If this is not possible, it is usually permitted that you pay 12 extra contributions instead or introduce a 3rd party sum.

There is protocol which has been agreed between creditors and practitioners which aims to make IVA’s fairer to both individuals and your creditors. We have more details on protocol compliant IVA’s.

Is an IVA suitable for me?

An IVA could be appropriate for you if you are struggling to make the monthly payments that creditors expect.  The most compelling benefit of an IVA is that you pay monthly affordable payments for a 5 or 6 year period with the unpaid balance being written off when the IVA is successfully completed.

The starting point for working out whether an IVA is appropriate is working out an “affordable” monthly payment would be and also how much you owe to your unsecured creditors. Examples of unsecured creditors whose debt can be included in an IVA are:

  • Credit cards and loans
  • Debts owed by you and someone else “jointly owed”
  • Monies owed to individuals including friends and family
  • Debts due to HMR & C including overpaid benefits, self assessment tax, VAT
  • Arrears of council tax and utilities
  • Trade creditors who supply you if you trade as self employed
  • Shortfall once a property has been repossessed

The debts that cannot be included in an IVA include:

  • Matrimonial debt – monies owed to an ex-husband or wife which a court has decided should be paid
  • Student debt
  • Court fines or fines for traffic violations

Our debt calculator will help you work out how your “affordable” monthly payment compares with the amount creditors want.

For full debt advice and whether an IVA would be your best option, you can also speak to one of our advisors.

Can an IVA stop action by creditors?

Yes but it depends on the action and how far it is has gone. We can apply for an “interim order” which prevents creditors from starting or continuing action against you. This includes writs, judgments, charging orders, liability orders and petitions for bankruptcy. It is vital if you are facing action to get in touch immediately. If you leave it too late, we might not have enough time to help you obtain an interim order before the debt becomes charged on your property or you end up bankrupt.

If you are made bankrupt and you have assets that are risk of being sold by your Trustee in Bankruptcy, it is possible to propose an IVA and if this is agreed by your creditors, your bankruptcy can be cancelled. You will need specialist debt advice on whether this is possible.

IVA – Advantages and Disadvantages

Finding the right solution is only possible if a clear picture is available of the short term and long term advantages and disadvantages of an Individual Voluntary Arrangement. An IVA is aimed at getting your unsecured debts paid off in a manner that is affordable but it is a formal and legally binding solution. An IVA is not easy and requires discipline. The Advantages and Disadvantages explained below can help you decide if an IVA is right for you.


  • You make affordable monthly payments usually for 5 or 6 years. (If you have a lump sum it is possible to offer a full and final IVA)
  • Unsecured debts remaining after an IVA is successfully completed are written off.
  • An IVA can protect your residential property.
  • An IVA prevents creditors from taking action or continuing from adding further interest or charges to their debt.
  • Protocol Compliant IVA’s give your Supervisor the power to allow payment breaks and extend the arrangement if there are missed payments.


  • Protocol compliant IVA’s provide that you must look to refinance your residential property in year 5 and if this is not possible, you can introduce a lump sum or pay 12 extra contributions instead.
  • Certain assets may not be protected such as windfalls, investment properties and savings
  • The IVA can fail if you do not adhere to the terms of the arrangement. Creditors will then pursue you for the balance and can even petition for your Bankruptcy if you owe them more than £5,000
  • An IVA requires creditors to vote on whether to accept, alter or reject the arrangement and any debts incurred after the date of approval cannot be included into the solution
  • An IVA means you have to live within an agreed budget for the period of the IVA and you cannot take on new credit without your Supervisor’s consent.
  • Any debt excluded from the IVA will remain outstanding.
  • Your credit rating will be affected for 6 years and details of your arrangement are added to the insolvency register.

The Debt Advisor Ltd is regulated by The Financial Conduct Authority. This means we are able to offer debt advice and deliver both formal and informal solutions. IVA’s do need to be carefully considered and you must take independent debt advice.  Your credit rating will be affected for up to 6 years after the IVA is approved. Please be aware that all IVA’s come with a fee and a breakdown of these fees will be clearly explained to you before entering into the solution. We hope that the information and debt advice on this site including Frequently Asked Questions, will help inform you.

There are sources of free debt advice and services. You can find out more by contacting the Money Advice Service on 0800 138 7777 or by visiting their website.

If you've read through our section and feel like you would like some further information, please call us on our 0333 9999 600 and one of our advisors will give you the right help and advice based on your individual circustance.