If you are struggling with multiple debts and finding it difficult to keep up with repayments, an IVA is one potential solution available in the UK, depending on your circumstances.
This guide explains how IVAs work, who they may be suitable for, the potential benefits and considerations, and how to take the next step.
An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement between you and your creditors. It allows you to repay what you can afford over a fixed period, typically around five years.
Payments are based on your income and essential living costs. At the end of the agreed term, any remaining unsecured debt may be written off.
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The general process includes:
A full financial assessment carried out by a qualified Insolvency Practitioner.
A formal IVA proposal is prepared and sent to your creditors.
If creditors representing 75%+ of the debt value approve, the IVA is accepted and all creditors are legally bound.
One affordable monthly payment. Interest and charges are often frozen, and creditor contact may be reduced.
Any remaining qualifying unsecured debt may be written off at the end of the agreed term.
You may be considered for an IVA if you:
Eligibility depends on your individual situation, including income, assets, and total debt.
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It's important to understand all options before proceeding.
A DMP is informal and may take longer, while an IVA is a formal agreement with a set end date. An IVA can also write off remaining debt on completion.
A DRO may be suitable for lower debts and minimal assets, whereas an IVA is typically for higher debt levels with regular income.
Consolidation combines debts but does not usually reduce the total amount owed.
Common debts that may be included: credit cards, personal loans, overdrafts, store cards. Some debts, such as certain fines, student loans, or secured debts, are not typically included.
If circumstances change, it may be possible to review your arrangement. Missing payments without communication could risk the arrangement failing, so early contact with your Insolvency Practitioner is important.
We are an independent introducer service. We do not provide financial advice or debt solutions directly. Instead, we connect individuals with suitable third-party providers who can assess eligibility and explain available options.
If you are struggling with debt and think an IVA may be an option, the best next step is to check your eligibility.
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