Individual Voluntary Arrangement (IVA)


  • Application must be through a licensed Insolvency Practitioner, we can refer you to our approved IVA panel of Insolvency Practitioners, they do not charge up-front client fees* & work with us to maximise positive outcomes & minimise duplication. You can also source your own Insolvency Practitioner by using the Gov UK Find an Insolvency Practitioner search.

  • No up-front fees* (usually, but check*)

  • Partial write off usually after 5 to 6 years, sometimes sooner with lump sum IVAs, can be later if repayment holidays are taken, or if additional income has not been declared

  • Debts usually > £7000 (can be lower depending on your individual circumstances, there is no upper limit)

  • Property protected (IVA Failure can place your property at risk again)

  • Regular income or satisfactory cash forecast or lump sum from third party or redundancy (can be all benefit income but should be checked carefully for affordability), or self-employed)

  • Monthly disposable income minimum > £50 but will depend on dividend payable to creditors & other factors. Stepped payments starting at nil are possible. The offer has to be considered your 'best offer' by voting creditors and affordable and sustainable for you.

  • HMRC Tax returns must be filed up to date

  • Income Tax included in the write-off

  • Can usually keep hire purchase vehicles, with a few exceptions

  • Your bank account must not have an overdraft facility during the IVA, you may need to change the type of account you have

  • Creditors are bound in if majority vote yes to proposal (75% ratio of the debts that vote at the meeting of creditors)

  • Affects credit rating for 6 years & may affect access to credit after 6 years due to low credit score

  • Entered on the Public Individual Insolvency Register

How it works

A licensed & regulated insolvency practitioner will prepare, negotiate & administer an arrangement for you to voluntarily repay your creditors. This may be done by using your spare income on a monthly basis, a lump sum or other assets that you own.

If you have a reasonable surplus income after meeting your essential household & personal expenses, or have assets that can be used to pay your creditors or have access to a lump sum, for example from a relative, an IVA may be appropriate. Doing this will protect you from recovery action that your unsecured creditors may take, & usually involve your creditors writing off part of what you owe them.

Creditors Voting

A proposal for an IVA will only be approved where enough creditors vote in favour, at the moment this is 75% (% share of the total indebtedness) of creditors that vote at the meeting of creditors. Creditors will also compare the amount they would receive (the dividend) from an IVA proposal to the amount they would receive from bankruptcy. This means that if you have a lot of equity or assets, creditors may reject your proposal.

Joint Debts

If you have joint debts, you can propose an interlocking IVA. Each party has an IVA, but the repayment is calculated & paid as one monthly payment. Each IVA will need to be approved at a creditor meeting.

It might not be necessary for a couple to both apply for an IVA, it might be more appropriate to apply for different debt solutions with different terms.

Choosing an Insolvency Practitioner

If you do not not wish to choose your own Insolvency Practitioner, Money Advice Hub can advise you fully on the IVA option, and is able to refer you to one our approved Insolvency Practitioner panel.


Fees are offset by your creditors from your IVA pot, the amount you are able to offer to repay towards your debt. You do not need to pay any fees up-front Fees usually comprise of a nominee (set up) fee , a supervisor fee & disbursements. A nominee fee is generally either £1000 or 5 x your 1st 5 instalments. The supervisor fee is the remaining 15% of realisations (your payments). Disbursements are itemised admin associated costs, such as software, postage, insurances & other welfare services. A lump sum IVA will incur less fees as it is usually completed a lot earlier than a repayment IVA.

Benefit Only Income

If you do not have any assets to protect & only have benefit income, it is unlikely an IVA will be appropriate debt option. Insolvency Practitioners can refuse to put forward IVA proposals that are inappropriate.

Is an IVA right for you?

Is an IVA right for you?

At the moment, regulators have failed to address the repeated concerns raised by the free debt advice sector with regard to consumer detriment and problems in the IVA market. It therefore falls on your individual responsibility to get FCA Regulated advice on all of your debt options before considering an IVA as your best debt option.

There are a number of lead generating firms using 'paid for' adverts on the internet to promote IVA's, most of them are not FCA authorised due to a loophole in the FCA regulation. This means you might be rushed into an IVA before exploring all of the other debt solutions carefully. Unauthorised firms have not passed the rigorous assessment process of the Financial Conduct Authority, and therefore might not have the appropriate skills and professional qualifications to advise you fully.

Many free debt advice organisations, such as Money Advice Hub, often deal with IVA complaints. Mostly these have arisen, because of poor advice practices at the front end of the advice process, but these can manifest during the IVA too.

Common issues identified are:

Incorrect financial statements showing more disposable income than is manageable.

Not properly advised about windfalls, overtime and bonuses.

Failure to undertake income maximisation, and identify qualifying welfare benefits.

Not dealing with priority debts properly, and further priority arrears accruing during the IVA.

IVA repayments paid instead of rent and council tax due to IVA supervision pressure.

Another debt solution, such as a debt relief order, is more suitable.

Failure to provide appropriate advice on a hire purchase agreement.

Unfair, and even unlawful modifications added to a proposal at the creditors' meeting.

Increases to the IVA repayment, without full consideration to a cost of living offset.

Interlocking IVA's for couples, whereby the partner was eligible for a debt relief order instead.

Exaggerated disadvantages of bankruptcy and debt relief order.

Please visit our web page on 'Problem IVA's'

Recommendation: Please make sure that you have been advised by an FCA regulated firm before proceeding with an IVA. An IVA can be the best debt option for some indebted people, but it is a formal contract that usually lasts a minimum of 5 years, and therefore needs a lot of explanation before committing to it.


  • Creditors who vote against your proposal are still bound by it when a majority vote approves the IVA.

  • Creditors whose lending is unsecured can’t take any further action.

  • Interest is usually frozen as long as you keep up your payments.

  • Your insolvency practitioner will verify your proposal, including confirming the level of your household and personal spending based on guidelines acceptable to creditors.

  • Most insolvency practitioners offset their professional fees within the IVA proposal that creditors vote on.

  • You make only a single payment each month or quarter. Your insolvency practitioner is responsible for administering and distributing your payments.

  • A third party can make IVA contributions on your behalf.

  • On completion of the IVA, the balance of what you owe your creditors is written off

  • There are some flexible options available if your circumstances change to minimise the risk of your IVA failing.

  • You are able to continue running any business you have.

  • Essential assets such as a vehicle or home are usually protected during the IVA.

  • You can keep a good percentage of any overtime you earn.

  • In many cases, you can retain essential vehicles on Hire Purchase, this will depend on the value of the vehicle, the repayment amount, and the credit provider.

  • The term of the IVA can be flexible if you are of senior years, and can evidence to creditors that a shorter IVA would be fairer.

  • You can still propose an IVA when you have equity in your home, but this will depend on the ratio of debt you have, your assets, and any special circumstances, such as health issues, or other social/economic factors.

  • If you come into a lump sum of money, you can, in certain circumstances, propose a variation to complete the IVA early with the lump sum.

  • You can still have a basic bank account during an IVA.


  • Some tenancy agreements do not allow a tenant to have an IVA, it is always advisable to check.

  • Your IVA is entered on the public Insolvency Service register and affects your credit for a minimum of 6 years. It’s removed 3 months after the IVA ends.

  • You cannot remain as a Charity Trustee during the IVA period and some professions may also prevent an IVA.

  • Some insolvency practitioners may require payment in advance for preparing your proposal and getting your creditors’ agreement, always check the fee contract terms.

  • If there is some equity (value) in your home after taking account of the mortgage(s) on it, you may be asked to obtain quotes to remortgage the property. It is often difficult to remortgage a property once you have been subject to an Insolvency solution, alternatively you may have to continue making monthly or quarterly payments from your income, for up to another year. Money Advice Hub is able to advise you on how this may affect you in more detail.

  • If your circumstances change, and your practitioner can’t get creditors to accept amended terms, the IVA is likely to fail. You will then still owe your creditors the full amount of what you owed them at the start, and a proportion of the Insolvency Practitioner’s fees, less whatever has been paid to them under your IVA.

  • If you come into a lump sum of money, a windfall, the Insolvency Practitioner will expect payment which could amount to all of your original debt plus fees. For example, if you decided to cash in a pension pot early, this would be considered a windfall.

  • If your IVA fails, you could be made bankrupt, although these circumstances are not common. If you own assets such as a home, your property could be placed at risk. A good Insolvency Practitioner will always try to avoid this circumstance.

  • An IVA is a legally binding agreement, you should be sure that you understand and agree with what is being proposed before signing.

  • You can add debts left out of the IVA, but only under certain circumstances.

  • Modifications (further obligations) can be added to the IVA proposal at the creditor meeting stage, it is important to understand what further obligations are being proposed before agreeing to them and being bound in.