Individual Voluntary Arrangement (IVA)

What is an IVA?

An Individual Voluntary Arrangement is a legally binding insolvency arrangement, normally lasting five or six years. It must be set up and supervised by a licensed insolvency practitioner. It is available in England, Wales and Northern Ireland; different arrangements apply in Scotland.

How it works

Your income, essential spending, debts and assets are reviewed to prepare a proposal. Creditors vote on it. If approved, you make the agreed payments and comply with the arrangement. Included creditors are bound by its terms. Remaining qualifying debt may be written off when it is successfully completed.

Who might consider it?

An IVA may be considered where someone cannot repay unsecured debts in full but can make sustainable contributions. There is no automatic entitlement based on debt level alone.

Important things to consider

• Your credit rating is affected, and an IVA normally stays on your credit file for six years from its start.
• Fees apply and are explained in the proposal. You appear on a public insolvency register.
• Homeowners may have to address equity in their home. Assets and some jobs can be affected.
• Not every debt can be included. Secured debts and certain other obligations need separate consideration.
• If the IVA fails, you may still owe debts and creditors may take action, including bankruptcy proceedings.

Compare the alternatives

A Debt Management Plan, Debt Relief Order, bankruptcy or another approach may be more suitable. Get individual advice before choosing.