The 5 Core Eligibility Criteria
To qualify for an Individual Voluntary Arrangement you generally need to meet all five of the following criteria. A licensed Insolvency Practitioner will assess your full situation during a free, no-obligation consultation.
- At least £6,000 in unsecured debt owed to two or more separate creditors — credit cards, loans, overdrafts, payday loans, HMRC debts, utility arrears.
- Two or more creditors — the creditors' meeting requires at least two parties to vote.
- Regular income — from employment, self-employment, benefits, or pension. You need disposable income after essential living costs to make monthly contributions.
- UK residency — England, Wales, or Northern Ireland. Scotland uses the Protected Trust Deed.
- Not currently bankrupt — you cannot enter an IVA while subject to an active bankruptcy order.
Income Requirements
There is no stated minimum income, but in practice you need at least £80–£100/month after essential living costs. Your IP prepares a detailed income and expenditure statement covering housing, utilities, food, transport, childcare, and essential clothing. What remains is your disposable income — and this becomes your proposed monthly IVA payment.
If your disposable income is very low, a Debt Relief Order (DRO) may be more appropriate than an IVA.
Homeowners and IVAs
Homeowners can enter into an IVA. However, a standard equity clause applies. In year 4 (around month 42–48), you will typically be asked to obtain a remortgage valuation. If you have equity, you may be required to release some of it — up to 85% LTV. If you cannot remortgage, the IVA is extended by 12 months instead.
An IVA does not force the sale of your home. The equity clause only requires a remortgage attempt — not a sale. This is a key advantage over bankruptcy.
Self-Employed Eligibility
Yes — self-employed individuals can have an IVA. Because income can vary, the IP typically uses an average of the past 12 months' net profit, or uses an annual review mechanism. Business debts can often be included alongside personal unsecured debts.
When an IVA May Not Be Suitable
An IVA is not always the best solution. Consider alternatives if your total debt is below £6,000, you have very little or no disposable income, you live in Scotland, you are already in a bankruptcy order, or your employment contract specifically prohibits insolvency arrangements.
Free advice first: Speak with StepChange (0800 138 1111) or MoneyHelper (0800 138 7777) for personalised, regulated debt advice before making any decision.
Next Steps
If you think you meet the criteria, use our free eligibility checker for an instant indicative result, or contact a free debt charity for personalised advice.