Money Advice, Debt Advice & Debt Help
IVA – Individual Voluntary Arrangement

IVA – Individual Voluntary Arrangement

IVA – Individual Voluntary Arrangement

An IVA allows you to settle your debt over a fixed period of 5-6 years. You pay reduced payments based on what you can afford.

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What is an Individual Voluntary Arrangement (IVA)?

Is an IVA the right debt solution for you? How long does an IVA last? What happens to any debt which remains unpaid? Can you offer a lump sum to pay off an IVA early? To find out more please visit

What is an IVA?

An IVA (Individual Voluntary Arrangement) allows you to reduce your debt payments to a single affordable amount. A standard monthly payment Arrangement normally lasts for 5-6 years.

Once the agreement is in place both you and your property are legally protected from your creditors. They are no longer allowed to take action against you or your home. After it is over any included debt still outstanding is written off.

It is possible to carry out the Arrangement without ongoing monthly payments if you can pay a one off cash lump sum. As such you might be able to use the solution if you do not have a regular income.

The debt solution is only available if you live in England, Wales or Northern Ireland. If you are living in Scotland you will need to consider one of the options available locally.

Is an IVA right for you?

You can only include unsecured debt in an IVA. Generally the minimum amount required is £6000 +. There is no maximum level. Secured debts such as your Mortgage cannot be included. You must continue to pay these.

The minimum amount you will have to pay into the Arrangement each month is normally £100. If you are unable to do this the solution might not be suitable unless a lump sum can be made available.

The Arrangement is private. Neither your employer or landlord (if you live in rented property) will be told. In addition assets such as your car will not be at risk. However if you are a property owner you need to understand the implications for your home.

An IVA will negatively affect your credit rating. Your ability to get new credit or other financial services will be seriously affected for at least 6 years.

The cost of an IVA

If you apply for an IVA you will pay nothing until it is set up and accepted. After this the only payments you make are those agreed within the Arrangement.

Once it is in place fees known as Nominee and Supervisor’s fees will be charged. You do not have to pay these yourself. They are taken out of the payments you make.

An advantage of an IVA is that you do not have to pay an up front fee. Your payments start once the Arrangement is agreed and in place.

How to start an IVA

To start an IVA you will need to complete a number of steps. Firstly you will have to provide details about your financial situation. These are recorded within a financial statement (often referred to as a Statement of Affairs).

You will need to include information about your income, living expenses, assets and debts. At this stage the amount you will have to pay into the Arrangement can be estimated.

You will then need to provide documents to confirm the information you have given. The amount you have to pay towards your debts can then be finalised and the Arrangement proposed to your creditors.

In order for your IVA to be accepted 75% of your creditors who vote by value must agree to it.

Government Advice about Dealing with Debt

As well as the information found on this website the Government’s Insolvency Service has produced a useful guide to personal debt solutions which you might also find useful: “Options for paying off your debts“.

Money Helper (provided by the Money & Pensions Service) is an independent service set up by the Government to provide people with free advice about all aspects of personal finances. For further information, please follow this link: Help if you are struggling with debt.

It is also recommended that you read this one page document produced by the Money & Pensions Service  entitled “Dealing with debt – 5 things you should know”.

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