IVA Frequently Asked Questions

An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement between you and your creditors. It allows you to repay a portion of your unsecured debts over a fixed period — typically 5 years — after which any remaining debt is legally written off. An IVA must be set up by a licensed Insolvency Practitioner (IP).

Read the full detailed answer →

Both are formal insolvency solutions, but they differ significantly. An IVA allows you to repay debts over time and keep assets like your home. Bankruptcy is quicker (usually discharged in 12 months) but can result in asset sales, employment restrictions, and appears on the Individual Insolvency Register permanently.

Read the full detailed answer →

An IVA must be arranged by a licensed Insolvency Practitioner (IP). IPs are regulated professionals — typically accountants or solicitors — authorised by a recognised professional body such as the ICAEW, IPA, ACCA or the Insolvency Service.

Read the full detailed answer →

An IVA may be right if you have significant unsecured debt, a regular income, and want to avoid bankruptcy. It's not suitable for everyone — alternatives such as a Debt Management Plan (DMP), Debt Relief Order (DRO), or bankruptcy may be more appropriate depending on your circumstances. Always seek regulated advice.

Read the full detailed answer →

General eligibility criteria: unsecured debts of at least £6,000 owed to two or more creditors; a regular source of income; UK residency (England, Wales or Northern Ireland); and no current bankruptcy order. Scotland has a different system — the Protected Trust Deed.

Read the full detailed answer →

Yes. Self-employed individuals can apply for an IVA. Because income may vary month to month, the IP will typically calculate an average or use an annual review mechanism. Business debts can sometimes be included alongside personal debts.

Read the full detailed answer →

Yes, homeowners can have an IVA. However, in year 4 of the IVA you may be required to release equity from your property (usually up to 85% LTV). If you cannot remortgage, the IVA may be extended by 12 months instead.

Read the full detailed answer →

There is no strict legal minimum, but most IVA providers require at least £6,000–£10,000 in unsecured debt owed to two or more creditors. Below this level, a Debt Management Plan (DMP) or Debt Relief Order (DRO) may be more cost-effective.

Read the full detailed answer →

Most IVAs last 60 months (5 years). If you're a homeowner and cannot release equity, the term may be extended to 72 months (6 years). Your IP can confirm the likely term during your initial consultation.

Read the full detailed answer →

Creditors holding at least 75% of the debt value must vote in favour. If rejected, you can revise and resubmit the proposal, explore alternatives like bankruptcy or a DMP, or your IP may negotiate modified terms. Rejection is not the end of the road.

Read the full detailed answer →

Missing payments can put your IVA at risk of failing. If you're struggling, contact your IP immediately — most can arrange a payment break or variation. If the IVA fails, creditors may petition for your bankruptcy. Communication with your IP is essential.

Read the full detailed answer →

Yes, IVAs can sometimes be settled early via a lump sum payment (a "full and final settlement"). Creditors must agree to accept the lump sum in lieu of remaining payments. This may occur through inheritance, a gift, or other windfall.

Read the full detailed answer →

You do not pay IVA fees upfront. Your IP's fees (nominee fee and supervisor's fee) are taken from your monthly payments before creditors receive their share. These fees are agreed in advance, disclosed in your proposal, and regulated by professional bodies. You should never pay anything upfront.

Read the full detailed answer →

Legitimate IVA providers do not charge upfront fees. If you are asked to pay a fee before your IVA is approved, this is a red flag. Be cautious of any company requesting upfront payments and always verify they are licensed with a recognised insolvency body.

Read the full detailed answer →

Yes. An IVA will be recorded on your credit file for 6 years from the date it starts. This will significantly impact your credit rating and ability to obtain loans, mortgages, or credit cards. After 6 years the record is removed and you can start rebuilding your credit.

Read the full detailed answer →

Yes. You can open and maintain a basic bank account during an IVA. Many banks offer basic accounts for those with poor credit. You should inform your IP if your bank closes your existing account as they can advise on alternatives.

Read the full detailed answer →

Your IVA will be listed on the Individual Insolvency Register, which is a publicly searchable register maintained by the Insolvency Service. It will also appear in your credit file. It is not generally advertised in local newspapers (unlike historically), but it is technically public information.

Read the full detailed answer →

Eligible unsecured debts include: credit cards, personal loans, store cards, bank overdrafts, payday loans, catalogue debts, HMRC tax debts, utility bill arrears, and council tax arrears. Excluded debts include mortgage, secured loans, student loans, child maintenance, and criminal fines.

Read the full detailed answer →

Yes. HMRC is a creditor like any other unsecured creditor and their debts — including income tax, VAT, and NI contributions — can be included in an IVA. However, HMRC can sometimes be a difficult creditor to negotiate with and your IP will need experience handling HMRC in IVA proposals.

Read the full detailed answer →

Your employer will not automatically be notified of your IVA. However, some employment contracts — particularly in financial services, law, or certain public sector roles — have clauses about insolvency. Check your employment contract and seek HR advice confidentially if unsure.

Read the full detailed answer →

If you receive an unexpected windfall — inheritance, lottery win, compensation — during your IVA, you must inform your IP. Depending on the terms of your IVA, you may be required to pay some or all of it into the arrangement. Your IP will advise on the specific rules.

Read the full detailed answer →

Unlike bankruptcy, an IVA does not generally restrict you from travelling abroad. However, you should ensure you maintain your payments and keep your IP informed of any significant changes to your financial situation, including extended time abroad.

Read the full detailed answer →

When you complete your IVA, your IP issues a completion certificate. All remaining included debts are legally written off. The IVA entry remains on your credit file for 6 years from its start date. You can then begin rebuilding your credit and financial life.

Read the full detailed answer →

After your IVA completes, you can start rebuilding credit by: opening a basic bank account, using a credit-builder credit card responsibly, registering on the electoral roll, ensuring old debts are marked as satisfied on your credit file, and keeping up with all new payment obligations.

Read the full detailed answer →

Getting a mortgage after an IVA is challenging while the IVA is on your credit file (6 years from start). Some specialist or adverse credit mortgage lenders may consider applications shortly after IVA completion, but rates will be higher. Most mainstream lenders require the IVA to have been off your file for some time.

Read the full detailed answer →