- Formal debt solution
Individual Voluntary Arrangement (IVA)
If you’re dealing with unsecured debt you can’t realistically keep up with, an IVA could bring it all together into one affordable monthly payment with interest frozen and creditors legally required to stop chasing you. It’s a formal, legally binding agreement, so it’s not the right fit for everyone, but for many people it’s the clearest route back to solid ground.
- Interest frozen on approval
- Remaining debt legally written off
- Creditor contact stops immediately
- Keep your home in most cases
*Takes less than 60 seconds. No impact on your credit score to check.
Check if you qualify
- 60 seconds
- No credit impact
- No obligation
Please note that debt solutions may not be suitable for everyone and fees may apply Click Here. Entering into an IVA will impact your credit rating.
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60
Payments typically
5
Years Typically Term
One
Combined Monthly Payment
- What is an IVA
What is an Individual Voluntary Arrangement (IVA)?
An Individual Voluntary Arrangement commonly known as an IVA is a formal, legally binding debt solution available to people in England, Wales, and Northern Ireland. It was introduced under Part VIII of the Insolvency Act 1986 to provide a structured alternative to bankruptcy for individuals with unmanageable unsecured debt.
When an IVA is approved, you agree to repay an affordable portion of your total debt based on what your income genuinely allows over a fixed term of five to six years. Your Insolvency Practitioner collects a single monthly payment and distributes it to your creditors. At the end of the agreed term, any remaining eligible debt is legally written off, even if your creditors have only received a fraction of what they were originally owed.
67,000+
Up to 70%
5–6 yrs
Important: An IVA is only available in England, Wales, and Northern Ireland. If you live in Scotland, the equivalent solution is a Protected Trust Deed. Go Debt Free can connect you with the right regulated specialist for your region.
The legal framework
An IVA is governed by Part VIII of the Insolvency Act 1986 (Sections 252–263). Under Section 253, once creditors representing 75% or more of the total value of your debt vote in favour, the IVA becomes binding on all creditors including those who voted against it or did not respond. This is one of the most powerful aspects of an IVA: minority creditors cannot opt out.
The IVA Protocol, updated in April 2025, sets out the standard framework that Insolvency Practitioners and creditors must follow for straightforward consumer IVAs. It exists to make the process faster, fairer, and more transparent for everyone involved.
- Your Step by step process
Not sure if an IVA is right for you?
Check your eligibility in 60 seconds no credit impact, no obligation, and no pressure. We introduce you to FCA-authorised specialists only.
- How It Works
How does an IVA work? The step-by-step process
Understanding exactly what happens during an IVA from first contact to completion removes a lot of the anxiety around the process. Here is how it works from start to finish.
Windfalls and pay rises:
If you receive an inheritance, redundancy payment, or significant pay increase during your IVA, you are legally obliged to inform your IP. Depending on the amount, some or all of it may need to be paid into the IVA. Always notify your IP immediately concealing financial changes can result in your IVA being cancelled.
- Eligibility
Who is eligible for an IVA?
There is no universal eligibility threshold set in law different Insolvency Practitioners and creditors may apply different criteria. However, the following are the widely accepted indicators that an IVA may be appropriate for your situation.
You are likely to qualify if:
You have at least £6,000 in unsecured debt
Owed to two or more separate creditors. IVAs are generally not cost-effective for smaller amounts of debt given the fees involved.
You have a regular monthly income
Either from employment, self-employment, or a reliable benefit. You must be able to demonstrate a consistent surplus after essential outgoings. Most IPs require at least £80–£200 per month available for contributions.
You live in England, Wales, or Northern Ireland
IVAs are not available in Scotland. Scottish residents should explore Protected Trust Deeds instead.
Your debts are primarily unsecured
credit cards, personal loans, overdrafts, payday loans, and store cards are all typically included. Secured debts, mortgages, and student loans cannot be included.
You are not currently in an active IVA or bankruptcy
you can only hold one insolvency arrangement at a time.
An IVA is likely not suitable if:
Your income is primarily state benefits
benefits are generally not suitable for IVA contributions as they are protected income. A Debt Relief Order may be more appropriate.
Your total assets exceed your total debts
In this case, it may be more practical to use assets to clear debts rather than enter a formal arrangement.
Most of your debts are to HMRC
HMRC generally does not accept IVA proposals where most of the debt relates to income tax, National Insurance, or tax credits arrears.
Your debt is very small (under £10,000)
the IP fees associated with an IVA may outweigh the benefit at very low debt levels. A DMP could be a simpler option.
Not sure if you qualify?
Our eligibility checker takes under 60 seconds and has no impact on your credit score.
- What's Covered
What debts can and cannot be included in an IVA?
Understanding which debts are eligible for inclusion is one of the most important aspects of IVA planning. Debts left outside your IVA still need to be managed separately, so your Insolvency Practitioner must review your complete financial picture before drafting the proposal.
- Typically included
- Credit card balances
- Personal loans
- Bank overdrafts
- Payday loans
- Store cards and catalogue debt
- Council tax arrears (in some cases)
- Money owed to friends or family
- Some HMRC debts (if a minor proportion)
- Typically Excluded
- Mortgages and secured loans
- Student loans
- Court fines and criminal penalties
- Child maintenance arrears
- TV licence arrears
- Rent arrears (landlord can still evict)
- Social fund loans
- Debts owed to EU creditors (generally)
Joint debts:
If you share a debt with a partner, spouse, or anyone else, the IVA only covers your share of the liability. Your creditors can still pursue the other person for the full outstanding balance. It may be worth exploring whether both parties need a separate debt solution.
- Pros & Cons
Advantages and disadvantages of an IVA
An IVA is one of the most powerful debt solutions available in the UK but it is not right for everyone. Understanding both sides honestly is essential before you proceed.
- Advantages
- Remaining debt is legally written off — often 50–70% of the total balance
- Interest and charges are frozen the moment your IVA is approved
- Creditor contact and enforcement action stops immediately
- You make one affordable monthly payment based on your real budget
- Your home is protected in most cases — you do not have to sell it
- You can continue working normally in most professions
- Once creditors holding 75% by value agree, all creditors are legally bound
- A clear end date usually five years with a defined resolution
- IP fees are included in your monthly payment, not paid upfront
- Disadvantages
- Recorded on your credit file for 6 years from the start date
- Listed publicly on the Individual Insolvency Register
- Some regulated professions may be affected check your contract
- Home equity may be reviewed in year 5 of a 5-year IVA
- Windfalls, inheritances, and pay rises must be disclosed to your IP
- If the IVA fails, creditors can resume action including bankruptcy
- You must adhere strictly to your agreed monthly budget for the full term
- Costs & Fees
IVA costs and fees : what will you actually pay?
One of the most common misconceptions about an IVA is that there are large upfront fees to pay. In the vast majority of cases, this is not true. All fees are included within your agreed monthly payment you pay the same amount each month regardless.
How IP fees work
Your Insolvency Practitioner charges two types of fee, both taken from your monthly contributions rather than billed separately:
Nominee's fee:
Covers the IP's work in preparing your proposal and arranging the creditors' vote. This is typically the first few months of your contributions.
Supervisor's fee:
Covers the ongoing management of your IVA over the term annual reviews, distributing payments to creditors, and handling any variations.
Average total IP fees:
According to the Insolvency Service, the average total cost of an IVA is approximately £3,650. This is deducted from your monthly contributions . your total monthly payment never increases to cover it.
What about debt management companies?
You do not need a debt management company to set up an IVA. You can approach a licensed Insolvency Practitioner directly, which is generally cheaper. Debt management companies acting as intermediaries often charge additional fees on top of the IP’s costs. Always clarify the full fee structure before signing anything.
| Fee type | What it covers | When charged |
|---|---|---|
| Nominee's fee | Proposal preparation and creditors' meeting | Early months of IVA |
| Supervisor's fee | Ongoing IVA management over full term | Spread across all payments |
| Disbursements | Admin costs (postage, registrations, etc.) | Included in total |
| Upfront fee | Should be none for a standard consumer IVA | None in most cases |
- Credit Impact
How does an IVA affect your credit score?
An IVA will have a significant impact on your credit profile but it is important to understand exactly what that means in practice, and how your situation can improve after the arrangement completes.
During your IVA
- Your IVA is registered on the Individual Insolvency Register, a publicly searchable database maintained by the Insolvency Service.
- Credit reference agencies (Experian, Equifax, TransUnion) update your credit file with the IVA this typically causes a significant drop in your credit score, often 200–300 points.
- Obtaining new credit, loans, or a mortgage during an active IVA is extremely difficult and generally prohibited under the terms of your arrangement without your IP's consent.
- Opening new bank accounts may be challenging some banks refuse accounts to people in an active IVA, though basic accounts are typically still available.
After your IVA completes
- Your IVA record remains on your credit file for six years from the date the IVA started — not from the date it completed. This means if you complete a 5-year IVA, there is only one year left on your credit file.
- The IVA entry is removed from the Individual Insolvency Register once it completes.
- Credit rebuilding typically begins immediately after completion. Many people successfully apply for secured credit cards or basic loan products within 12–18 months of finishing their IVA.
- Specialist mortgage lenders may consider applications within 2–3 years of IVA completion, though rates will be higher than standard products.
Important perspective:
If you are already missing payments and accumulating defaults, your credit profile is likely already significantly damaged. An IVA provides a structured path to resolution and while the short-term credit impact is real, it is often no worse than the ongoing defaults you are already accumulating.
Self-employed: You can enter an IVA and continue trading while self-employed. Your business debts may be included in the arrangement, and your IP will factor your business income into the assessment. A specialist self-employed IVA may be structured differently to a standard consumer IVA.
- Alternatives
IVA alternatives is there a better option for you?
An IVA is not the only solution, and it is not always the most appropriate one. Understanding how it compares to other options helps you and your adviser make the right decision
| Solution | Debt written off | Income needed | Credit impact | Best for |
|---|---|---|---|---|
| IVA | Yes remaining balance | Yes regular income | 6 years | Multiple creditors, regular income, £6k+ debt |
| DMP | No full balance | Yes for payments | Variable | Flexible informal option, lower debt levels |
| DRO | Yes all listed debts | No low income only | 6 years | Low income, under £30k debt, minimal assets |
| Bankruptcy | Yes after 12 months | Not required | 6 years | No realistic repayment prospect, larger debts |
- Check Eligibility
Find out if an IVA could work for you
It takes under 60 seconds. There is no impact on your credit score, no obligation to proceed, and we only ever connect you with FCA-authorised debt solutions providers.
- No impact on your credit score to check
- FCA-authorised introductions only
- No obligation to proceed at any stage
- Your details are handled confidentially
- We never sell your data to third parties
Check if you qualify
- 60 seconds
- No credit impact
- No obligation
Please note that debt solutions may not be suitable for everyone and fees may apply Click Here. Entering into an IVA will impact your credit rating.
Help also available on
- Good to know
Frequently asked questions
An IVA (Individual Voluntary Arrangement) is a formal, legally binding agreement between you and your creditors that combines unsecured debt into one affordable monthly payment, typically over five to six years, with remaining eligible debt written off at the end.
You’ll generally need £6,000 or more of unsecured debt, owe money to two or more creditors, have a steady income, and live in England, Wales, or Northern Ireland. A full assessment of your circumstances is needed to confirm eligibility.
Yes. An IVA is recorded on your credit file for six years from when it starts, and will affect your ability to get new credit during that time.
Only unsecured debts, such as credit cards, loans, overdrafts, and certain arrears. Secured debts like mortgages, and specific debts like student loans or court fines, cannot be included.
Speak to your Insolvency Practitioner as soon as possible a payment break may be an option. If payments stop altogether and the arrangement fails, your original debts return, and you become responsible for repaying them individually.
Yes. It’s recorded on the Insolvency Service’s public register and appears on your credit file, so it can be seen by credit reference agencies and, in some cases, employers.