What Is an Individual Voluntary Arrangement (IVA)?

Individual Voluntary Arrangements – IVA


What Is an Individual Voluntary Arrangement (IVA)?



There is no set criteria for an IVA – each Insolvency Practitioner sets their own qualifying criteria, which usually depends on your debt level, debt type and number of creditors. This solution is available to residents of England, Wales and Northern Ireland – residents of Scotland have access to Scotland-specific debt solutions.

Advantages and Benefits

  • An IVA offers you legal protection from your included creditors.
  • An IVA offers you 1 single affordable payment.
  • An IVA usually has a fixed term of 60 months/ 5 years, and at the end of the arrangement, any outstanding balances on included debts will be written off.
  • The payment you make into an IVA is based on your Income and Expenditure so should always be affordable to you.
  • There are no upfront fees; fees are incorporated into your monthly IVA payments and vary between IVA companies.
  • Interest and charges on included debts will be frozen.
  • You could write off between 25-85% of your debt. A debt write off of 25-85% is realistic, however the amount written off will depend on your own financial circumstances and cases must be approved by the majority (by value) of your creditors. To qualify for this solution, you should have at least £5000 of qualifying unsecured debt owed to 2 or more creditors.

Disadvantages and Potential Consequences

  • Any debts not bound by your IVA will remain outstanding and you are responsible for keeping up with their repayments.
  • Your credit file will be affected for a period of 6 years, starting when the IVA is approved. Your ability to obtain credit will be restricted for the period of the IVA.
  • An IVA can impact on certain jobs such as those in finance and the Civil Service – if you are unsure check your employment contract.
  • If you are a homeowner, you may be asked to re-mortgage 54 months into the IVA,
    which may incur higher interest rates than your previous mortgage.
    If this is not possible, you may be required to extend your IVA by a further 12 months.

  • Failure to keep up with IVA payments may result in your creditors filing for your bankruptcy.
  • Your details will appear on a publicly searchable record.
  • Your creditors may not agree to your IVA which may stop the arrangement from going ahead.
  • Your expenditure will be restricted.