England, Wales and Northern Ireland
Individual Voluntary Arrangements
An Individual Voluntary Arrangement (IVA) is a legally binding agreement with your creditors to pay back some or all of your debts over a set period, usually five or six years. It must be set up and supervised by a licensed Insolvency Practitioner.
How it works
- An Insolvency Practitioner reviews your circumstances and drafts a proposal to your creditors.
- Creditors vote on the proposal. If creditors holding at least 75% of the debt value that vote agree, it becomes binding on all included unsecured creditors.
- You make regular payments (and sometimes contributions from assets such as property equity) for the agreed term.
- At the end of a successful IVA, remaining included unsecured debts are normally written off.
Things to consider
- IVAs involve fees, which are usually taken from your payments.
- An IVA is not suitable for everyone. Eligibility depends on your circumstances and creditor approval is not guaranteed.
- IVAs are recorded on the public Individual Insolvency Register.
Risks and consequences
- An IVA will be recorded on your credit file for six years and is likely to affect your ability to borrow.
- If you cannot keep up payments, the IVA may fail and you could be made bankrupt.
- Homeowners may be required to release equity towards the end of the arrangement.
- It may affect some jobs or professional memberships.
This page is general information, not advice. Money Surgeon does not recommend specific solutions. Whether any option is suitable depends on your full circumstances — speak to a qualified adviser before making decisions.