This solution is only available in England, Wales and Northern Ireland.
Individual voluntary arrangements. Is an IVA right for you?
An individual voluntary arrangement (IVA) is a formal agreement to repay your creditors at an amount you can afford.
This can be a one-off payment known as a lump sum IVA or over a longer period to spread payments which usually lasts five or six years. You make one affordable payment to us each month and we distribute it fairly among your creditors. During your IVA creditors should not contact you or increase your debt.
When the final payment is made, any remaining debt is written off.
IVAs are not available if you live in Scotland. In Scotland, a protected trust deed is a similar solution, but it’s important to note that it has different benefits, risks and fees associated with it.
IVA at a glance
Is an IVA suitable for me?
An IVA may be suitable if you can afford to pay something to your debts, but not the full amount your creditors want. If you have a lump sum to pay towards your debts, you may also qualify for an IVA.
You can only apply for an IVA if you live in England, Wales or Northern Ireland.
How does an IVA work?
An IVA is managed by an insolvency practitioner (IP), who can help you draw up a repayment proposal to send to your creditors.
Your IP will arrange a meeting of your creditors, where your creditors will decide whether to accept or reject your proposals. If your IVA is accepted it becomes legally binding. As long as you keep to the terms of your IVA, none of your unsecured creditors (even those who didn’t vote or who voted against the IVA) will be able to pursue you for any debt incurred prior to approval of the IVA. An IVA is a form of insolvency so it’s important that you get expert, impartial advice before entering into one. Please see our Get Debt Advice page.
How much are IVA fees?
There are always fees involved when you set up an IVA. The fees that you’ll need to pay are the nominee fee which is the fee that covers the cost of setting up your IVA. The Supervisor fee is for the administration of the IVA and there are disbursement fees which are costs that we pay out to a third party during the IVA.
At The fees are paid out from monthly contributions (or from proceeds of a sale of assets), so there is never anything to pay up front.
Before you enter into an IVA, there are other issues you should take into consideration first:
- Should the IVA fail, creditors may back date interest on your debts or may request that the Supervisor of your IVA petitions for your bankruptcy.
- Once your IVA is set up, your spending will be restricted until the IVA comes to an end.
- Should your circumstances change during the term of your IVA, you may ask creditors to review the terms you originally agreed to. During your IVA you’ll receive an annual review and If your situation has improved, you may have to increase your payment.
- At the end of an arrangement, only debts included in the arrangement will be discharged.
- Any debts that can’t be included will still be left to pay, for example any money owed under family court proceedings, any court fines or debts arising from fraud, debts incurred after the IVA, or student loans.
- We do not charge you for the advice and support we provide before your IVA is set up. There are fees involved in running your IVA. Our Insolvency Practitioners fees are lower than industry standard for IVAs. You must agree to the level of fees before your IVA is approved. The insolvency Practitioner will deduct these fees from your monthly payment, so you don’t have to pay any additional costs.
- If you’re a homeowner you’ll be asked to re-mortgage your property 6 months before your IVA ends. If you are unable to re-mortgage, you could make a maximum of 12 extra payments or a 3rd party could offer a sum equivalent to the equity as an alternative.