IVAs explained
An IVA is a legally binding agreement to pay your creditors what you can afford for a fixed period, usually 5 or 6 years. It works well for some people and is the wrong choice for many others.
What is an IVA?
An individual voluntary arrangement (IVA) is a formal agreement with your creditors, made under Part VIII of the Insolvency Act 1986 (in Northern Ireland, the Insolvency (Northern Ireland) Order 1989). You make one monthly payment, based on what is left after your essential living costs, to a licensed insolvency practitioner, who shares it out between your creditors. Once creditors approve it, interest and charges on the included debts are frozen and the creditors bound by it cannot take further action to recover those debts. A standard IVA lasts 60 months, or 72 months if you own a home and your share of the equity is £10,000 or more. If you make every payment and keep to the terms, whatever is left of the included debts is written off at the end. How much you repay depends on what you can afford and what creditors accept, so nobody can promise you a figure. Read what an IVA is for the full picture.
IVAs are available in England, Wales and Northern Ireland only. If you live in Scotland, see debt solutions in Scotland.
Who does an IVA tend to suit?
The IVA Protocol 2025, the standard framework for consumer IVAs, describes the typical person as someone with:
- a regular, sustainable income that does not come mainly from state benefits or the state pension
- several debts adding up to £7,000 or more
- money left over each month after essential costs
- straightforward assets, such as a single family home or no property at all
That £7,000 figure is guidance, not law. There is no legal minimum debt. Citizens Advice suggests an IVA usually suits people owing more than £10,000 with at least £100 a month spare. See who qualifies for an IVA for the detail.
Who is an IVA usually wrong for?
The Protocol says an IVA is unlikely to be suitable if you:
- could get a debt relief order instead
- could clear your debts through a debt management plan in a similar time, with creditors getting back significantly more
- have very low debts or very little spare income, because fees would take a large share of what you pay
- live mainly on state benefits or the state pension
- have disputed debts, more than one property, a buy-to-let, or trade debts as a sole trader
What are the downsides?
- Fees: there is no legal cap. Citizens Advice says IVA fees are around £5,000 on average, and your early payments go mostly on fees rather than your debts.
- Time: five or six years on a tight budget, with your income reviewed every year and half of any rise in spare income added to your payment.
- Your credit file: the IVA stays on it for 6 years from the start date, and it appears on the public Individual Insolvency Register while it runs.
- Failure: about one in three IVAs started between 2016 and 2018 ended early without completing. If yours fails, creditors can chase the full balances again, add back frozen interest and charges, and ask a court to make you bankrupt.
Our pros and cons of an IVA guide sets these against the benefits, and IVA or bankruptcy? compares it with the main alternative.
Want to know whether an IVA could work for you? Answer a few questions about your debts and income. It takes about 3 minutes, and it is free and confidential.
How these guides are organised
The guides below fall into three groups.
- The basics covers what an IVA is, how it works, who qualifies, how long it lasts, what it costs, the pros and cons, and the myths worth ignoring. Start here if you are weighing it up.
- Setting one up walks through applying, the documents you will need, what an insolvency practitioner does, how creditors vote, and particular situations such as having a CCJ or a partner with debts too.
- During and after explains paying off early, what happens if an IVA fails, how it ends, and how the insolvency register works.
For day-to-day questions about your home, credit file, job and family while an IVA runs, see life in an IVA.
Before you decide anything
Free, impartial debt advice is available from MoneyHelper, StepChange, Citizens Advice and National Debtline, and they can set up most debt solutions for you. See where to get free debt advice.
IVA Helpline does not set up IVAs or give regulated advice. If you use our checker, we may pass your details to a licensed insolvency practitioner or debt adviser. An insolvency practitioner will then assess whether an IVA is suitable for you.
The basics
- What is an IVA? The legal basics: what an IVA is, which debts it covers and what it means for you.
- How does an IVA work? Step by step: assessment, creditor vote, monthly payments, reviews and completion.
- Who qualifies for an IVA? Minimum debt, spare income, benefits, homeowners and the situations where an IVA rarely fits.
- What debts can and cannot go into an IVA? Which debts an IVA covers, which it cannot, and the grey areas such as rent arrears, HMRC and joint debts.
- Does an IVA stop debt collectors and bailiffs? What stops and when, for debt collectors and bailiffs, and the debts an IVA does not protect you from.
- Can you get an IVA on benefits or Universal Credit? How benefits are treated in an IVA, why benefits-only income rarely suits one, and what else to look at.
- Can you get an IVA if you live in Scotland? Why IVAs do not apply in Scotland, the Scottish alternatives, and what happens if you move.
- How long does an IVA last? 5 or 6 years for most IVAs, what can extend or shorten one, and how long the records last.
- How much does an IVA cost? The fees in an IVA, how they are taken from your payments, and how that compares with other options.
- Pros and cons of an IVA The real advantages and disadvantages of an IVA, side by side, with how it compares to other options.
- IVA myths and the facts Common claims about IVAs, from write-offs to homes to credit files, and what is actually true.
Setting one up
- How to apply for an IVA The application process from first advice to the creditor vote, and the questions to ask.
- What documents do you need for an IVA? A checklist of the paperwork for an IVA application, and what you will need each year after.
- What goes into an IVA proposal? What the law and the IVA Protocol require in a proposal, the key facts document, and what to check before signing.
- What is an insolvency practitioner? What an IP does in an IVA, who licenses them, how to check one, and how to complain.
- How creditors vote on an IVA, and the rules they follow How the creditor vote works, the 75% rule, and what creditors must and must not do afterwards.
- Can you get an IVA if you have a CCJ? How a county court judgment is treated in an IVA, what stops and when, and what stays on your record.
- Can you get a joint IVA? Why there is no joint IVA, how interlocking IVAs work for couples, and what happens to joint debts.
- How to choose an IVA provider How to check an insolvency practitioner and any referrer, the red flags to watch for, and what to ask.
- How to spot a debt company or advert to avoid Red flags in debt adverts and IVA firms, why they matter, and how to check a firm before sharing details.
During and after
- What happens at an IVA annual review? What the yearly review checks, the evidence you send, the 50% rule, and what happens if you do not reply.
- What if you cannot afford your IVA payments? Payment breaks, reductions, variations and settlements, what counts as a breach, and what else you can do.
- Can you pay off an IVA early? The ways to end an IVA early, how a full and final settlement works, and what paying early does not change.
- Can you cancel an IVA? Withdrawing before the vote, ending an IVA after approval, what it costs you, and the alternatives.
- Are there legitimate ways out of an IVA? The legitimate routes out of an IVA, what each one costs you, and the so-called loopholes to avoid.
- What happens if an IVA fails? How often IVAs fail, the breach process, what happens afterwards and the options that are left.
- What happens at the end of an IVA? Completion certificates, which debts are written off, the register, your credit file and what to check.
- How to search the insolvency register How to search the insolvency register step by step, what an entry shows and when it is removed.
- How to complain about your IVA or change provider Who to complain to about an IVA, the time limits, what each route can do, and how a supervisor can be changed.
Common questions
Can I set up an IVA myself?
No. Only a licensed insolvency practitioner can put an IVA proposal to your creditors and supervise it. Acting as one without a licence is a criminal offence.
Do IVAs exist in Scotland?
No. IVAs are available in England, Wales and Northern Ireland only. The nearest option in Scotland is a protected trust deed.
Is an IVA a government scheme?
No. It is a formal procedure set out in the Insolvency Act 1986, run by private, licensed insolvency practitioners. Be wary of any advert that calls it government backed.