Individual Voluntary Arrangement (IVA)

What is an IVA?

An Individual Voluntary Arrangement is one of the formal debt solutions available in England, Wales and Northern Ireland. It's set up by a licensed Insolvency Practitioner — a regulated professional whose role is created under the Insolvency Act 1986 — and once it's in place, both you and your creditors are legally bound by its terms.

The basic shape is simple: instead of trying to pay everything you owe at its original contractual rate, you pay a single affordable monthly amount for a fixed period (most commonly five years). When the term ends, any qualifying unsecured debt that's still outstanding is written off.

To put the scale in context, 64,050 IVAs were registered in England and Wales during 2024 alone, according to figures published by the Insolvency Service. That makes it one of the most widely used formal routes for dealing with problem debt in the UK.

How an IVA works in practice

The process moves through a number of clear stages, and every step involves a regulated Insolvency Practitioner — never an unregulated firm.

1. Full review of your finances. The Insolvency Practitioner looks at everything: what you earn, what you spend on essentials, what you owe, and what you own. From this, they work out what (if anything) you could realistically afford to pay each month.
2. Drafting the proposal. If an IVA looks suitable, the IP writes a formal proposal setting out the monthly payment, how long the arrangement will run, and how each creditor will be repaid.
3. The creditors' vote. Creditors then vote on whether to accept. The proposal goes through if creditors representing at least 75 per cent of the total debt (by value, of those who vote) agree to it.
4. Registration. Once approved, the IVA is added to the Individual Insolvency Register — a public record kept by the Insolvency Service that anyone can search.
5. Making the payments. You then pay your agreed monthly amount to the IP, who divides it between your creditors. You don't deal with creditors directly during the IVA.
6. Completion. At the end of the term, the IP issues a Certificate of Completion. Any qualifying unsecured debt that remains is written off at that point.

Who an IVA tends to suit

IVAs are aimed at people in a fairly specific situation. The common pattern is:

• You live in England, Wales or Northern Ireland (Scotland has different equivalents such as Trust Deeds and the Debt Arrangement Scheme)
• The unsecured debts you owe couldn't be cleared in a reasonable timeframe at the contractual repayment amounts
• You have a steady income that leaves room for an affordable monthly payment after essential living costs
• You want to avoid bankruptcy, and you don't qualify for a Debt Relief Order

The IVA Protocol 2025 — the current rulebook for protocol IVAs — is explicit that IVAs aren't suitable for people with very low debt totals. If your debts come to less than £7,000, the Insolvency Practitioner has to set out clearly in the proposal why an IVA, rather than a DRO or another route, is the best fit.

What an IVA costs

IVAs aren't free. The fees are paid to the Insolvency Practitioner and come straight out of the monthly payments you make into the arrangement (rather than being charged on top). Those fees split into two parts:

• The Nominee's fee covers the upfront work — preparing the proposal and putting the IVA in place
• The Supervisor's fee covers running the arrangement month-to-month over its full length

Since the 2025 Protocol came in, fees and any other costs have to be disclosed clearly before you sign anything. There's now a mandatory key facts document that lays out the fees, the implications for homeowners, how your monthly payment is calculated, and how the IVA will affect your credit file.

How long an IVA lasts

Most protocol IVAs are set up to run for five years (60 months). The exception is where you have a beneficial interest in a family home worth £10,000 or more — in that case, the term stretches out to six years (72 months).

The "beneficial interest" figure is worked out by taking 85 per cent of the property's value and subtracting anything secured against it, like your mortgage. Anything below the £10,000 threshold is disregarded under the 2025 Protocol (it used to be £5,000), which means smaller amounts of equity won't be drawn into the IVA at all.

Which debts an IVA can cover

Most everyday unsecured debts can be included. The usual candidates are:

• Credit cards and store cards
• Personal loans and overdrafts
• Catalogue debts and payday loans
• Council tax arrears
• Certain HMRC debts
• Outstanding utility bills

Some debts can't go in. Secured debts (mortgages, car finance), court fines, child maintenance arrears, student loans, and TV licence debt all sit outside the IVA. Your Insolvency Practitioner will confirm exactly which debts qualify in your case — it can sometimes vary.

How an IVA affects your credit, home and work

An IVA leaves a footprint on your credit file. It's recorded on the public Individual Insolvency Register and shows on your credit report for six years from the start date. For that period, getting credit will be harder, and what you can get will tend to be more expensive.

Certain jobs have specific restrictions. Roles in financial services, parts of the legal profession, and positions requiring security clearance can have contractual rules about entering an insolvency arrangement. If you work in one of these areas, your employment contract is the first place to check before you go any further.

Where there's property equity above the £10,000 threshold, the family home itself doesn't form part of the IVA under the 2025 Protocol — but, as covered above, the IVA term extends to 72 months to reflect that interest.

The IVA Protocol 2025 — what changed

The IVA Protocol is the voluntary framework published by the Insolvency Service that sets out how consumer IVAs should be run. From 1 July 2025, every new protocol IVA has to follow the revised 2025 version, which brought in a number of new consumer protections:

• A mandatory key facts document must be given before you sign up
• Tighter suitability checks, especially where debts are under £7,000
• The family home equity threshold raised from £5,000 to £10,000
• A standard 60-month term, extending to 72 months where there's property equity
• A new duty to signpost free debt advice if an IVA is terminated early

The revisions came out of a 2024 Insolvency Service review which looked at 310 terminated IVAs and found that 60 per cent of them showed signs of poor practice in the early stages. The 2025 Protocol was developed alongside regulators, the insolvency trade body R3, creditors, IVA providers and charities.

If an IVA stops working

Life happens. If your circumstances change — lost income, illness, a major unexpected expense — and the payments stop being affordable, the right move is to contact your Insolvency Practitioner straight away. They can look at options including a payment break, a variation to the IVA terms, or, if it's the only option, termination.

If an IVA is terminated, you become liable for the original debts again (less anything you've already paid). The 2025 Protocol now requires the IP to point you towards free, regulated debt advice at that stage, or confirm you know what other solutions exist.

How UK Debt Team can help

We're an introducer, not a debt advice service. That distinction matters: deciding which debt solution is right for you is the role of a regulated debt adviser or a licensed Insolvency Practitioner — not us.

What we do is connect people seeking help with regulated solution providers who can carry out that assessment. There's no cost or obligation to you for using the “Speak to an IVA specialist” button below. If you'd rather go straight to free regulated debt advice instead, the organisations listed below are an excellent place to start.