What You Need to Know Upfront
Before we walk through the process, here are the most important facts about IVAs at a glance.
Typically 60 Months
Most IVAs run for 5 years. Homeowners may have a 6-year term if equity cannot be released.
One Monthly Payment
Based solely on your disposable income after reasonable living costs. No more juggling multiple creditors.
Legally Binding
Once approved, ALL listed creditors are bound — even those who voted against. They cannot chase you outside the IVA.
Licensed IP Required
An IVA must be set up by a licensed Insolvency Practitioner — a regulated professional authorised by a recognised body.
Home Usually Protected
Your home is not automatically at risk in an IVA, unlike bankruptcy. Equity may be considered in year 4.
Remaining Debt Written Off
When you complete your IVA, any remaining included debt is legally extinguished. It's a genuine fresh start.
The 5-Step IVA Journey
Here's exactly what happens at each stage of an IVA, from your very first conversation to the day your debts are written off.
Free Initial Consultation
Week 1–2Your journey begins with a free, no-obligation consultation with a licensed Insolvency Practitioner (IP). This is usually done by phone or video call and takes around 30–60 minutes.
During this call, the IP will review:
- Your total debts and who you owe them to
- Your monthly income (from all sources)
- Your essential monthly outgoings (rent, food, utilities, transport)
- Any assets you own (property, vehicles, savings)
This consultation is completely free. A legitimate IP will never charge you for this initial assessment. Be wary of any firm that asks for payment upfront.
IVA Proposal Drafted
Weeks 2–6If an IVA appears to be the right solution, your IP will act as your nominee and draft a formal IVA proposal. This is a legal document that outlines:
- Full details of your financial situation (income, expenses, assets, debts)
- The proposed monthly payment amount
- How long the IVA will last (typically 60 months)
- The IP's fees (nominee fee + supervisor's fee)
- Any special terms (such as equity release provisions for homeowners)
You will review and sign this proposal before it is sent to your creditors. Make sure you understand every term before signing.
Creditors Vote on the Proposal
Week 6–8A formal creditors' meeting (now often conducted by post or online) takes place, at which your creditors vote on whether to accept your IVA proposal.
For the IVA to be approved, creditors representing at least 75% of the total debt value must vote in favour. This is a simple majority by monetary value, not by number of creditors.
- Creditors usually prefer an IVA to bankruptcy — they typically recover more money
- Your IP will negotiate any modifications creditors request
- If approved, the IVA legally binds ALL creditors listed, including those who voted against
Approval rates are high. The majority of IVA proposals are accepted. Your IP's experience negotiating with creditors is a key factor in success.
Monthly Payments Begin
Months 1–60Once your IVA is approved, you make a single monthly payment to your IP (the supervisor), who distributes it among your creditors according to the agreed terms.
- Creditor calls and letters must stop immediately
- Interest and charges on included debts are frozen
- You maintain your payment for the full 60-month term
- Your IP conducts an annual review to check your income hasn't significantly changed
- If your income increases, your payment may increase proportionally
If you experience a temporary financial hardship (job loss, illness), contact your IP immediately. Most can arrange a payment break or variation — but you must communicate proactively.
Homeowners: In year 4, you may be asked to release equity from your property (up to 85% LTV). If you cannot remortgage, the IVA is typically extended by 12 months instead.
IVA Completion — You're Debt Free
Month 60+After making your final payment, your IP issues a completion certificate. This is the moment all remaining unsecured debt included in your IVA is legally written off.
- Creditors cannot pursue you for any remaining balance
- Your IP notifies the Individual Insolvency Register that your IVA is complete
- The IVA entry remains on your credit file for 6 years from the start date
- You can begin rebuilding your credit immediately
Congratulations — you're debt free. The IVA completion certificate is your proof. Keep it safe. You are now free to rebuild your financial future.