• Home
  • Individual voluntary arrangement (IVA)

IVA help and IVA advice

Complete this form and we'll find the right option for you

Call us on our freephone number 0808 163 9579

Replay video

I understand I will be contacted. Privacy policy

* required field


An alternative to bankruptcy

An Individual Voluntary Arrangement is usually referred to as an IVA and can be an effective debt solution if you are in serious debt (owing more than £10,000). It is usually viewed as an alternative debt solution to bankruptcy.

An IVA is an Individual Voluntary Arrangement because it is a debt solution you enter into of your own choosing, unlike bankruptcy which can be forced upon you.


  • Freezes interest by law
  • Ends creditor chasing
  • Provides an affordable five year (typically) payment plan

IVA advantages & disadvantages


  1. Unsecured debts are written off at the end of a fixed term.
  2. Interest payments are frozen by law.
  3. You pay one monthly affordable payment.
  4. Your assets (house, car etc) are protected, subject to the terms of your IVA.
  5. Payments are calculated to be affordable. While in an IVA, your home is protected from legal action provided you maintain your mortgage payments. Unsecured creditors cannot force you to sell it.
  6. Creditors cannot chase you.
  7. All unsecured creditors are bound by the agreement.


  1. You cannot obtain credit whilst in an IVA
  2. Credit rating is poor for a year after the IVA (provided your IVA lasts five years). If you finish the IVA earlier than five years your credit rating remains poor for longer.
  3. Default can result in bankruptcy.
  4. Creditors may not accept the proposal.
  5. If you have equity in your home you may be required to release it to your creditors. This is usually achieved by increasing the level of your mortgage towards the end of your IVA. If this is not possible, you are likely to be required to extend your IVA payments by up to 12 months.

IVA benefits to you

Some of the benefits of an IVA are that you can address all of your unsecured debt after a certain period - typically five years - and you only pay your creditors what you can afford.

Avoiding bankruptcy

One of the major benefits of an IVA is that it can help you avoid the threat of bankruptcy. If bankruptcy is a real possibility, then your creditors might prefer an IVA if it means they will get more of their money back.

How does an IVA work?

The first step of an IVA is to prepare your proposal and have it accepted by creditors. During this stage, based on an assessment of your current financial situation, your Insolvency Practitioner (your IP), will prepare your proposal to be sent to your creditors. The IP will then request a meeting with your creditors to consider the proposal and negotiate with them on your behalf.

There will then be a vote on the proposal. If creditors representing 75% of the debt vote in favour, the arrangement will become legally binding to you and your creditors.

If the vote fails, the IP may renegotiate with your creditors and request another meeting. Once again there will be a vote and if creditors representing 75% of the debt vote in its favour, the IVA will become applicable.

Once an IVA is approved, the Insolvency Practitioner will take on the role of Supervisor for the five year period. This will involve ensuring that the money is handled correctly and that appropriate payments are made to your creditors.

If your financial situation changes during the period of the IVA agreement, simply contact your IP who will renegotiate the terms of the arrangement.

IVA and creditors

If your debts are so serious that there is a very real risk of bankruptcy, this might mean your creditors could end up with nothing, or very little at all. In these circumstances they may well agree to an IVA so that they at least get some of their money back.

Will an IVA work for me?

This depends on your individual circumstances. If you have debts in excess of £10,000, but are in regular employment, an IVA could be your best solution to getting out of debt. But there are still alternatives.

Implications of entering into an IVA

An IVA (Individual Voluntary Arrangement) can help you avoid many of the major implications of bankruptcy, but there are still some important considerations. For full details talk to a Help with Debt Consolidation partner.

The implications of an IVA are not the same as with bankruptcy

With bankruptcy, the financial implications can be far-reaching and long lasting. For instance, you could lose your home.

While this is unlikely to happen with an IVA, it's important you get advice from someone who will help you decide the best solution for you based on your situation, while weighing up all the pros and cons.

What an IVA involves

Your IVA provider takes a close look at your financial situation and, with your agreement, presents an offer to your creditors where you promise to pay back an affordable amount each month for five years.

An IVA is a legally binding agreement between you and your creditors. As long as you keep up your repayments, after five years your creditors will write off the remaining debt you cannot afford to repay.

Implications of IVA FAQs

How do I know how much I will have to pay through my IVA?

This is finalised after you have discussed your situation with your IVA provider and they have negotiated with your creditors. Remember the whole point of an IVA is to make your new monthly repayments affordable.

For more information regarding IVAs, call us now on 0808 163 9579 to speak to an advisor or complete the form below.

Complete this form and we'll find the right option for you

Call us on our freephone number 0808 163 9579

Replay video

I understand I will be contacted. Privacy policy

* required field