Individual Voluntary Arrangements (IVA)

An IVA works by setting up a legally binding repayment plan between you and your creditors, managed by a licensed Insolvency Practitioner (IP). It’s designed to help you repay what you can afford, usually over five to six years, while protecting you from further creditor action.

Step-by-step IVA process:

1. Prepare your IVA proposal: Your Insolvency Practitioner (IP) will help you to compile your debts, assets, income and expenses, and work out a realistic monthly payment.
2. Review and submission: Your IP checks the proposal, then sends it to your creditors for consideration.
3. Creditor meeting and vote: Creditors vote on whether to accept your IVA. At least 75% (determined by the value of debt) must agree for it to be approved.
4. Possible amendments: Creditors can suggest changes. Your IP will review these with you before you agree.
5. Approval and start date: Once accepted, the IVA becomes legally binding, and you begin making payments as agreed.

Key points:

• An IVA protects you from most legal action by creditors once it’s in place.
• If you keep up with your payments, remaining unsecured debt can be written off at the end of the term.

An IVA is a formal, legally binding agreement between you and your creditors to pay your debts. You make affordable payments, usually for five or six years, through a licensed Insolvency Practitioner (IP) who manages the process.

At the end of the term, any debt included in the IVA that you haven’t been able to repay is usually written off. It’s one of the main alternatives to bankruptcy for people in England, Wales and Northern Ireland.

The IVA Protocol is an industry agreement, supported by major banks and lenders, that sets out how consumer IVAs should be put together. It was introduced to protect customers by making sure IVAs are fair and not overly complicated.

It also helps ensure the paperwork is easier to understand and that the impact on you is explained clearly before it goes ahead.

Your proposal is the formal document that explains your situation to creditors. It lists your debts, income, spending and any assets, and then sets out what you can realistically pay back.

Creditors vote on whether or not to accept your proposal. If creditors representing 75% or more of your debt vote to accept your proposal, then the IVA is accepted.

You agree to pay as much as you can reasonably manage each month. Creditors also expect you to:

• Pay in any lump sums you may receive, like a bonus or inheritance, to your arrangement
• Let your assets be considered as part of the deal, for example, if you have significant equity in your home, it could mean your IVA lasts for six years rather than five.

Your Insolvency Practitioner will go through exactly what applies before anything is signed off.

Yes. Once an IVA is approved, creditors are required to freeze all interest and charges on your debts.

This means your balance won’t keep growing in the background, and if you keep to the agreement, anything leftover at the end is written off.

You might still be able to do a one-off lump sum IVA. Instead of paying over several years, you or someone on your behalf offers creditors a single payment, usually from savings, family help or equity in a property.

In a lump sum IVA the whole process can take as little as three months, compared with five years in a monthly payment IVA.

If you’re in an IVA and finding it difficult to keep up with payments, your Insolvency Practitioner (IP) may be able to reduce the monthly amount. In many cases, this means extending the IVA term to balance out the change.

For those who have been in an IVA for some time and kept up with agreed repayments, your IP might also be able to negotiate an early settlement based on what you’ve already paid.

The whole process can be completed in less than six weeks. Once your proposal is drafted, creditors are asked to review and vote.

If they approve, legal action and collection calls must stop, giving you breathing space straight away.

Once you have received debt advice and decided an IVA is the right debt solution for you, we will need you to provide:

• Details of all your debts and creditors
• Proof of your income and spending
• Information about assets, like property or savings

This helps your Insolvency Practitioner build a proposal that shows creditors exactly what you can and can’t afford.

You will not be made to sell your home, since an IVA is designed to protect your home.

If your IVA was approved after July 2025, your equity only affects whether the IVA lasts 5 or 6 years.

In older, or non-protocol IVAs, you may be asked to try to remortgage near the end, or your IVA could be extended to 6 years instead.

You don’t pay anything upfront. IVA fees are agreed upon by your creditors and taken from the payments you make once the arrangement is running. You do not pay anything extra to cover the fees.

The exact amounts vary depending on the firm you use – it’s important you understand the fees before you go ahead with an IVA.

It’s also important to be aware of the risks. If your IVA fails early, you will still owe any remaining debt in full, and creditors could take further action, which might include bankruptcy. For tailored advice on IVA costs and risks, please contact us for professional debt support.