Individual Voluntary Arrangement (IVA)

Introduction

An Individual Voluntary Arrangement (IVA) is a formal, court-approved process designed to help individuals in England, Wales, and Northern Ireland manage unmanageable unsecured debt. If you are finding it difficult to maintain your monthly contractual debt repayments, an IVA may provide a structured way to pay back a percentage of what you owe over a fixed period — typically five to six years.

How an IVA Works

An IVA is managed by a licensed Insolvency Practitioner (IP). They will assess your income, expenses, and overall debt level to create a proposal that is both affordable for you and acceptable to your creditors.

1. 1
   Creditor Protection

   Once your IVA is legally approved (75%+ of creditors by value agree), they must stop charging interest and cease all collection enforcement actions against you.

2. 2
   One Affordable Payment

   You make a single monthly payment that your Insolvency Practitioner distributes among your creditors — simplifying your finances into one manageable amount.

3. 3
   Debt Write-Off

   If you successfully complete your IVA, any remaining balance on your qualifying unsecured debts is typically written off at the end of the arrangement.

Key Considerations

An IVA is not a quick fix and comes with important long-term implications you should understand before proceeding.

• Credit Impact

  An IVA is recorded on the Individual Insolvency Register and will negatively affect your credit file for six years from the start date, making it harder to obtain credit during this time.

• Fees

  Licensed Insolvency Practitioners charge fees for their services, which are usually deducted from your monthly payments before distribution to creditors.

• Asset Risk

  If you are a homeowner, you may be required to release equity from your property — which could involve remortgaging in the final year of your IVA.

Is an IVA Right for You?

An IVA is generally suitable when you have unsecured debts of £7,000 or more owed to two or more creditors, have a regular income but cannot afford contractual repayments, and want legal protection from creditor action while working towards becoming debt free. It is not suitable for everyone — always seek regulated advice specific to your situation.

How Debt Free Path Can Help

• How IVAs work in the UK and whether you may be eligible based on your financial circumstances
• What alternative solutions are available if an IVA is not the right fit for you
• What to expect before, during, and after an IVA — with no jargon
• How to access free, independent advice from regulated debt specialists