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What is an IVA?

An Individual Voluntary Arrangement also known as an IVA is a formal solution for individuals that have unsecured debts and are struggling with repayments.


An IVA is administered and managed by an Licensed Insolvency Practitioner. It is a legally binding agreement that helps people to repay debts at a more affordable rate and within a realistic time frame. An IVA is a piece of government legislation which was passed through the insolvency act 1986

An IVA will usually last for a period of 5 years and during this time creditors included in the agreement will freeze interest and charges and write off any remaining debt at the end of the arrangement.

Individuals who enter into an IVA are protected from unsecured creditors taking further legal action against them including petitioning for their Bankruptcy and they are no longer allowed to contact them about their debts.

Write-off 100% of your debt

Write-off 100% of your debt

Advantages of an IVA

Creditors who vote against your proposal are still bound by it.

Creditors whose lending is unsecured cannot take any further action.

Interest is usually frozen as long as you keep up your payments.

Your insolvency practitioner will help you prepare your proposal, including agreeing the level of your household and personal spending based on guidelines acceptable to creditors.

Many insolvency practitioners will allow you to pay their fees for preparing your proposal monthly, as part of the IVA.

You make only a single payment each month. Your insolvency practitioner is responsible for administering and distributing your payments.

The terms of an IVA will usually enable you or your spouse or partner or a relative to make arrangements to buy your share of the net worth of your home or to make extra payments, rather than the home having to be sold. This may be done through a remortgage or a loan. (Net worth means its value after any debts secured on it have been paid).

On completion of the IVA, the balance of what you owe your creditors is written off.

You may be able to continue running any business you have.

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Things to Consider

Your IVA is entered on a public register.

The insolvency practitioner may require payment in advance for preparing your proposal and getting your creditors’ agreement.

If your circumstances change, and your practitioner cannot get creditors to accept amended terms, the IVA is likely to fail. You will then still owe your creditors the full amount of what you owed them at the start, less whatever has been paid to them under your IVA.

If there is some equity (value) in your home after taking account of the mortgage(s) on it, you will probably have to pay for your share, usually in the fifth year of your IVA, by remortgaging the property. If you cannot get a remortgage, you may have to continue making monthly or quarterly payments from your income, for up to another year.

If you fail to adhere to the terms or your IVA it may fail and creditors could charge any interest that had been frozen or you may be made declared bankrupt.

Loans from Family and Friends, Student Loans and some other debts cannot be included in your IVA.

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