Life in an IVA
Most people in an IVA carry on living in the same home and working in the same job. What changes is money: a set budget for 5 or 6 years, a yearly review, and limits on borrowing.
An IVA shapes your life for five or six years without taking it over. You live on a set budget, keep your supervisor (the licensed insolvency practitioner running the IVA) up to date, and pay in part of any extra money that comes your way. For most people the hard part is not the paperwork but sticking to a tight budget for that long while life keeps changing.
IVAs are available in England, Wales and Northern Ireland only. If you live in Scotland, see debt solutions in Scotland.
What changes from day to day?
- Your budget: household essentials such as rent or mortgage, council tax, energy, food and travel to work come first, measured using the Standard Financial Statement. What is left becomes your payment. See how much an IVA leaves you to live on.
- A yearly review: on each anniversary your supervisor checks your income and spending. If your spare income has gone up, your payment rises by half of the increase. If it has gone down, your payment can be reduced.
- Borrowing: credit of more than £500 needs written approval from your supervisor.
- Your credit file: the IVA stays on it for 6 years from the start date, so most new borrowing is hard or expensive. See how long an IVA stays on your credit file.
What must you tell your supervisor?
Under the IVA Protocol 2025 standard terms, which apply to protocol IVAs (the standard type for consumers) from 1 July 2025, you must:
- keep your supervisor up to date with your address, phone number, email and job details
- tell them within 14 days if overtime, bonus or commission takes your pay more than 10% above your normal take-home pay, and pay in half of the amount above that 10%
- tell them within 14 days if you are given notice of redundancy
- tell them about any asset, windfall or inheritance worth more than £500 that you receive during the IVA
- get their written approval before taking credit of more than £500
IVAs agreed before 1 July 2025 follow the terms in their own proposal, so check yours. The detail is in pay rises, bonuses and windfalls.
What about your home, job and family?
If your protocol IVA started on or after 1 July 2025, you will not be asked to sell your home or release equity. If your share of the equity is £10,000 or more, the IVA runs for 72 months instead of 60. Older IVAs can work differently, so read what happens to your home and belongings. If you rent, your tenancy carries on as long as the rent is paid.
The insolvency practitioner does not tell your employer. There is no legal bar on working, or on being a company director, in an IVA, but some employers and professional bodies have their own rules. See will your employer find out.
The IVA is in your name only, but the budget usually covers the whole household, so a partner’s income and spending are part of the picture. See will an IVA affect your partner.
Is it hard to stick to?
For many people, yes. About one in three IVAs started between 2016 and 2018 ended early without completing. When an IVA fails, creditors can chase the full balances again, add back frozen interest and charges, and ask a court to make you bankrupt. Insolvency Service research on IVAs set up and then failed between 2021 and 2023 found 60% showed poor practice at the start, such as an inaccurate budget. Check every line before you sign, and read what happens if an IVA fails. To weigh up an alternative, see IVA or debt management plan?
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.
- Home and money: your budget, home and belongings, mortgages, renting, windfalls and inheritance.
- Your credit: your credit rating and credit file, passing credit checks, declaring an IVA after 6 years, and car finance.
- Work, family and travel: your job, your partner, going abroad and starting a business.
Where to get help that costs nothing
Free, impartial debt advice is available from MoneyHelper, StepChange, Citizens Advice and National Debtline, whether you are thinking about an IVA or already in one and struggling. 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.
Home and money
- How much does an IVA leave you to live on? How your IVA budget is worked out, what counts as essential, and how yearly reviews change it.
- Bank accounts, phone contracts and insurance in an IVA Bank accounts and set-off, basic bank accounts, phone and energy contracts, insurance and the £500 rule.
- What happens to your home and belongings in an IVA? The 2025 homeowner rules, the equity calculation, and your car, pension, savings and bank account.
- Can you get a mortgage with an IVA? Your current mortgage, remortgaging, moving home, and applying for a mortgage after an IVA.
- Can you rent a home with an IVA? Staying in your current tenancy, rent arrears, passing referencing for a new home, and moving.
- What happens if you inherit money during an IVA? How inheritances are treated in an IVA, how much you keep, and what to do if you inherit.
- Pay rises, bonuses and windfalls in an IVA Overtime, bonuses, pay rises, redundancy and windfalls: what to declare and how much you keep.
Your credit
- How does an IVA affect your credit rating? Why an IVA lowers your rating, how it compares with other options, and how to rebuild afterwards.
- How long does an IVA stay on your credit file? The 6-year rule, IVAs that last longer, the insolvency register, and checking all three agencies.
- Can you pass a credit check with an IVA? The £500 credit rule, which checks are about borrowing, soft and hard searches, and getting approval.
- Can you borrow money or get a credit card in an IVA? The £500 rule, supervisor consent, credit cards, loans, car finance, family loans and buy now pay later.
- Do you have to declare an IVA after 6 years? When an old IVA still has to be disclosed, and when it does not.
- How to rebuild your credit after an IVA After completion: checking all three credit files, the electoral register, credit builders and timing.
- Can you keep your car on finance in an IVA? Keeping a car on hire purchase or PCP, handing one back, new finance and compensation payouts.
Work, family and travel
- Will your employer find out about your IVA? Who is told about your IVA at work, which jobs have rules, and what to report to your supervisor.
- Will an IVA affect your partner? Joint debts, joint accounts, the household budget, a shared home and your partner's credit file.
- Can you travel abroad with an IVA? Holidays, work trips and moving abroad during an IVA, and how to pay for them.
- Can you get an IVA if you are self-employed? Sole traders, partners and directors, keeping tools and trading, uneven income and HMRC in an IVA.
- Can you start a business during an IVA? Self-employment, limited companies, business credit and tax while you are in an IVA.
Common questions
Will friends or neighbours find out about my IVA?
Nobody is sent a notice. Your IVA is listed on the public Individual Insolvency Register while it runs and for about 3 months after it ends, so someone could find it if they searched for your name.
Can I go on holiday during an IVA?
Yes. Nothing in an IVA stops you travelling. The cost has to fit within your agreed budget, and you cannot borrow more than £500 to pay for it without written approval from your supervisor.
Can I still have a bank account?
Yes. If you owe money to the bank you use, move your income to a bank you owe nothing to before the IVA starts, because a bank can take money from your account to pay a debt you owe it.