What is an Individual Voluntary Arrangement?

An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement between you and your creditors to repay what you can afford over a set period, typically 5-6 years. Administered by an Insolvency Practitioner (IP), an IVA typically lasts five years, although it may be extended by 12 months for homeowners if they are unbale to release equity in the final year. Creditors vote to approve or reject the proposal, with 75% (by value) required to agree for it to proceed.

Debt Support Service provides FCA-regulated debt advice and, if an IVA is the right solution for you, we can refer you to a licenced insolvency practitioner who specialises in the proposal and administration of IVAs.

Eligibility criteria

To qualify for an IVA with our trusted partner, you must:

Have debts of £7,000 or more.

Owe money to at least two creditors.

Have a fixed income.

Be able to pay at least £100 per month toward your debts.

How does an IVA work?

Proposal creation

Your Insolvency Practitioner drafts a repayment proposal to present to your creditors.

Creditor approval

At least 75% of your creditors (by value) must approve the IVA.

Payments and oversight

You make regular monthly payments, which your IP distributes to creditors. Any new income or assets must be reported and may need to be paid in.

Completion

After successful completion, any remaining debts included in the IVA are written off.

Benefits

One affordable monthly payment.

Interest and charges are frozen once approved.

Creditors cannot take further action to recover debts included in the IVA.

Most debts can be included.

Remaining debts included in the IVA are written off upon completion, provided you adhere to its terms.

Considerations

Your credit rating will be affected for six years.

You’ll appear on the Insolvency Register, which is a public record, for the duration of the IVA until three months after completion.

Restrictions apply, such as requiring consent to borrow more than £500.

If the IVA fails, you could face bankruptcy.

Fees are deducted from your monthly payments.

Examples of debts that can be included*

Credit & Store Cards

Personal loans

Catalogues

Overdrafts

Buy Now, Pay Later

Payday loans

Examples of debts that may be included*

Utility bill Arrears
(gas, electric, water)

HMRC debts
(self-assessment)

Benefit overpayments
(DWP or local authority)

Council Tax Arrears

Rent arrears

Debts to friends or family

*Depending on the situation we may be able to include these. If we can’t, we may be able to help you budget for them outside of the plan.

Examples of debts that cannot be included*

Child maintenance arrears

Student loans

Secured loan arrears

Court fines

Mortgage arrears

Car financing arrears
(including PCP & HP)

*We may be able to help you budget for these outside of the plan.

If your debts include both types, our advisers will guide you on how best to manage your overall financial situation.

FAQS

FAQ's

Can I be refused an IVA?

Yes, if less than 75% of your creditors approve the proposal. Your IP can revise the terms and resubmit the proposal.

How might an IVA affect my life?

An IVA may require changes to your spending habits, and any significant new income or assets must be reported to your IP, who may adjust repayment terms accordingly.

Does my employer need to know about my IVA?

Not usually, unless you work in financial services, law, or accountancy. Check with your HR department if unsure.

Can I close my IVA early?

Yes, if you receive a lump sum to repay your debts in full. Approval from your IP and creditors is required.

Is saving possible during an IVA?

Yes, small savings from your approved budget can help cover unexpected expenses.

How much debt can an IVA write off?

The amount depends on how much you’ve repaid during the term. Remaining qualifying debts are written off at the end.

What constitutes a breach of an IVA?

Failure to:

Make agreed payments.
Report changes in financial circumstances.
Sell agreed assets.
Pay additional income.

What fees are involved in an IVA?

Fees typically include:

Nominee Fee: For drafting and presenting the proposal.
Supervisor Fee: For managing the IVA.

Combined fees above are typically fixed at £3,650 and are deducted from your monthly payments.

How can Debt Support Service help?

Our knowledgeable team can assess the best option for you and connect you with trusted partners who can administer the arrangement.