An Individual Voluntary Arrangement is a formal agreement to pay back what you can afford over a set term, after which the rest of the debts included may be written off. It can help, but it isn't right for everyone. Here's the honest version.
No upfront fees to talk. Free, impartial debt advice is also available from charities, we'll always point you there too.
Illustration only. Your figures, term and whether an IVA suits you depend entirely on your circumstances and creditor approval. Many IVAs run for 5–6 years.
An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement between you and the people you owe money to. You agree to pay back what you can realistically afford, usually a set monthly amount, and at the end of the term, any remaining balance on the debts included is normally written off.
It's set up and run by a licensed Insolvency Practitioner (IP). They put your proposal to your creditors, and it becomes binding on everyone if creditors representing at least 75% by value of those voting agree to it. Once it starts, the creditors included stop adding most interest and charges and stop chasing you.
IVAs are available in England, Wales and Northern Ireland. Scotland has its own equivalents, a Protected Trust Deed or the Debt Arrangement Scheme. They're designed for unsecured debts like credit cards, loans, overdrafts and catalogue debt. Mortgages, secured loans, most student loans, court fines and child maintenance can't usually be included.
An IVA is a serious commitment, not a quick fix or a guaranteed write-off. Whether it's the right tool depends on how much you owe, what you can afford, your assets, and which creditors you owe.
From first conversation to final certificate, here's the journey. Each step is genuinely worth understanding before you commit to anything. Read the full walkthrough.
You go through your income, spending, debts and assets, ideally after getting impartial advice, to see whether an IVA is even the right fit.
An Insolvency Practitioner works out a realistic monthly payment and drafts a proposal to your creditors, setting out the fees and the term.
Creditors vote on the proposal. If those holding 75% by value of the debt agree, the IVA is approved and becomes binding on all included creditors.
You make your agreed payments, with a yearly review. Finish them all and you receive a completion certificate, remaining included debt is written off.
An IVA suits some situations and is the wrong choice for others. A good advisor will tell you when it isn't for you, so will we.
No debt solution is all upside. Here's the balanced picture so you can judge it for yourself. See the full pros and cons.
One affordable monthly payment, based on what you can realistically pay.
Most interest and charges on included debts are frozen.
Creditors included must stop contacting you and can't take court action.
Any remaining included debt is written off once you complete it.
It's a structured, legally binding alternative to bankruptcy.
It's recorded on your credit file for six years and on a public register.
Fees are significant and come out of your monthly payments first.
If you miss payments it can fail, interest and charges can be added back.
You may have to release equity from your home near the end of the term.
Borrowing is heavily restricted while it runs; some jobs are affected.
An IVA is one of several routes out of debt, and not always the cheapest or best. A good advisor will go through all of these with you before recommending anything.
For lower debts, few assets and little spare income. A one-off £90 fee can clear qualifying debts, far less than an IVA for those who qualify.
An informal arrangement to pay creditors a reduced monthly amount. Not legally binding, but flexible, and you can set one up free through a charity.
A government scheme giving you up to 60 days of protection from interest, charges and enforcement while you get advice and decide what to do.
Can write off debt where there's no realistic way to repay. Serious consequences for assets, but sometimes the right fresh start for the right situation.
If you're in Scotland, a Protected Trust Deed or the Debt Arrangement Scheme are the equivalents to an IVA, an IVA itself isn't available there.
Charities give free, impartial advice on every option above. You never have to pay anyone to find out what's best for you. Details are below.
These are general guides, not a decision. Only a full look at your circumstances can tell you what's right, but if most of these sound like you, it's worth a conversation.
Answer a few quick questions and an advisor will call to go through all your options, not just an IVA. If something else suits you better, we'll say so. Prefer to picture the numbers first? Try the IVA calculator.
You never have to pay anyone to understand your options. These organisations are free, independent and won't try to sell you anything. We'd genuinely encourage you to speak to one of them before agreeing to any debt solution.
Most IVAs based on monthly payments run for five or six years. The exact length is set out in your proposal and depends on what you can afford and what your creditors agree to.
Yes. An IVA is recorded on your credit file for six years from the date it starts, and it appears on the public Individual Insolvency Register while it's running. Your ability to borrow will be limited during this time, and your credit score will drop.
The Insolvency Practitioner charges fees for setting up and running the IVA. You don't pay these upfront, they come out of your monthly payments, and typically your early payments go more towards fees than to your creditors. The IP must explain all the fees clearly before you agree to anything.
An IVA is for unsecured debts. You generally can't include a mortgage or other secured loans, rent or mortgage arrears, most student loans, court fines, child maintenance, or (usually) debts where HMRC makes up most of what you owe. Any debts left out have to be dealt with separately.
If you stop making payments your IVA can fail. If that happens, creditors can start chasing you again and may add back interest and charges that were frozen, which can leave you owing more than you expected. This is why it's so important to only commit to an amount you can realistically sustain.
No, though both are forms of insolvency. An IVA is an arrangement to pay back part of what you owe over time and is often used to avoid bankruptcy. Bankruptcy is a separate process with different consequences. Which is right depends entirely on your circumstances, a good advisor will compare them with you.
No. You can get free, impartial advice on IVAs and every other option from charities like StepChange, National Debtline, Citizens Advice and the government's MoneyHelper service. We'd always encourage you to use them to sense-check your options.
An IVA can bring real relief, but it carries lasting downsides too. The honest way to decide is to read both sides properly before you commit to anything.
One affordable monthly payment, based on what you can genuinely afford.
Interest and charges on included debts are usually frozen.
Included creditors must stop contacting you and can't take court action.
Any remaining included debt is written off once you complete it.
It stays on your credit file for six years and on a public register.
Fees are significant and come out of your monthly payments first.
If you miss payments it can fail, and frozen interest can be added back.
Borrowing is heavily restricted while it runs, and some jobs are affected.