Money Advice, Debt Advice & Debt Help
The Minimum Payment for an IVA
Money Advice, Debt Advice & Debt Help

The Minimum Payment for an IVA

The Minimum Payment for an IVA

The amount you will have to pay into an IVA each month is based on what you can afford. However a minimum payment is normally required.

Jump to article content:

Want help to start an IVA? Give us a call (0800 077 6180) or complete the form below to speak to one of our experts

What is the Minimum Payment for an IVA?

A monthly payment IVA is based on making a single payment towards your debt each month. There is no pre-determined acceptable payment amount. It is entirely based on what you can afford.

Having said that a minimum payment is usually required. You will normally only be able to start a monthly payment IVA if you can afford at least £100 a month.

In certain circumstances it may be possible to pay less. However this is normally based on the expectation that your payments will rise during the Arrangement.

It is possible for two people who have the same amount of debt to be paying different monthly amounts into their IVA

How is your IVA Payment Calculated?

The amount you have to pay into your IVA is based on your disposable income (also known as surplus income). This is the amount left over from your income after all your monthly living expenses have been budgeted for.

Working out your disposable income is one of the most important jobs you have to do during the IVA application process. If you get it wrong your payment could be too high and you will struggle to pay it.

You have to pay 100% of your disposable income into the Arrangement. You cannot be seen to be holding any back. If you do your creditors are unlikely to agree to your IVA at the creditors meeting.

Need help to calculate what your IVA payment will be? Give us a call or fill in the form below to speak to one of our experts.

Can your IVA Payment ever Go Up?

It is important to understand that your IVA payments are not fixed. They can go up if you can afford to pay more during the Arrangement.

One of the main reasons for your payments to increase is if your income goes up. 50% of any extra disposable income you have will be added to your remaining payments.

You will also have to pay more into your IVA if you have one off increases in your income. The most common reasons for this are if you earn extra overtime or get a bonus.

If your financial situation becomes worse it may be possible to reduce the payments you make. However this is not guaranteed.

Do you have to pay Windfalls into your IVA?

If you get a windfall during your IVA your ongoing monthly payments will not change. However you will have to pay the money you have received into the Arrangement.

Common examples of windfalls are things like an inheritance or a compensation payment. Generally speaking 100% of the amount you receive has to be handed over to your IVA company.

Paying a windfall into your IVA does not normally mean it is paid off any sooner. You will have to continue making your normal monthly payments. The affect is simply that your creditors will be paid more overall.

Depending on the terms of your IVA you may be allowed to keep a windfall if it is less than £500.

Arrange a call with an IVA Expert

Need help to start a Individual Voluntary Arrangement?

Privacy Policy
Your information will be held in strictest confidence and used to contact you by our internal team only. We will never share your details with any third party without your permission.

2 thoughts on “The Minimum Payment for an IVA

  1. Marcin says:

    Hi I have a question about situation after IVA. I know IVA is in records for 6 years but what if I would paid it off in full within first 2years? Is it still in my records for next 4 years or my records will be clear earlier?

    1. Hi Marcin

      If you pay off your IVA early this will not improve your credit rating. The record of the IVA will remain on your credit file for the full 6 years regardless of whether you pay it early or not.

Leave a Reply

Your email address will not be published. Required fields are marked *

Learn how your comment data is processed.