• Individual Voluntary Arrangement (IVA)

    What is an IVA?

    In short, an Individual Voluntary Arrangement – commonly known as an IVA – is a legally binding arrangement between you and your unsecured creditors.

    You agree to make a single consolidated affordable monthly repayment, typically for a period of five years. At the end of the IVA, any remaining unsecured debts are written off.

    Before diving into the details of an IVA, let’s first clarify the difference between secured and unsecured debt.


    Secured or Unsecured Debts?

    Secured Debts:
    These debts are secured against an asset, such as a mortgage on your home. If you default on payments, creditors have the right to seize the asset. Repossession is a common outcome when secured debts are not maintained.

    Unsecured Debt:

    These debts are not backed by any collateral. Examples include credit card debt, personal loans, and store card debt. While creditors cannot seize assets for unsecured debts, they can take legal action, impact your credit rating, and engage debt collection agencies.

    Key Points about IVAs:

    1. Eligibility: Typically, you need a minimum debt level of £6,000 with at least two lenders to apply for an IVA. It is suitable if you have a regular income stream or a lump sum to contribute towards debt repayment.

    2. Creditor Approval: An IVA requires agreement from creditors who represent at least 75% of your total debt. If approved, the IVA applies to all your credit lines, regardless of whether smaller creditors agree.

    3. Debt Coverage: An IVA covers various unsecured debts, including credit cards, store cards, personal loans, catalogues, council tax, and more. Certain debts, such as student loans and child support arrears, cannot be repaid through an IVA.

    4. Homeownership Considerations: As a homeowner, an IVA can provide protection against asset loss. However, you might be required to release equity by remortgaging your property or making additional contributions.

    Couple Calculating all their Bills
    Benefits of an IVA:
    Considerations for an IVA:

    IVA Compared to other Debt Solutions


    • Debt written off after fixed term (usually 5 years)
    • Legally binding agreement with creditors
    • Credit Rating impact: 6 years
    • Minimum debt of £6,000
    • Repayment: 5 years


    • Single consolidated monthly payment
    • Informal agreement with creditors
    • Credit Rating impact: Varies
    • No minimum debt level
    • Repayment: Varies


    • Debt written off after 12 months Asset distribution and potential loss
    • Legally binding agreement with creditors​
    • Credit Rating impact: 6 years
    • No minimum debt level
    • Repayment: 12 months


    • Debt written off after 12 months
    • Legally binding agreement with creditors​
    • Credit Rating impact: 6 years
    • Debts below £30,000 and Personal assets below £2,000
    • Repayment: 12 months

    Protected Trust Deed

    • Potential to keep home
    • Legally binding agreement with creditors​
    • Credit Rating impact: 6 years
    • Minimum Scotland Residency of 6 months
    • Repayment: 4 years

    *Please note that the durations provided are general guidelines and can vary based on individual circumstances. It’s important to consult with a licensed debt advisor or Insolvency Practitioner for accurate and up-to-date information regarding the duration and repayment terms of each debt solution.

    Should you decide to apply for an IVA, bear in mind that:

    Use our quick and easy debt tool here.  Whether an IVA is the best way for you to proceed or not.

    What Types of Debts Can’t Be Repaid with an Individual Voluntary Arrangement UK?

    What Are the Implications of An IVA If You’re a Homeowner?

    On one hand, an IVA provides the protection bankruptcy doesn’t, by ring-fencing your home if you’ve got a mortgage.

    On the other hand, you might be -expected to take out a re-mortgage to generate a lump sum to go towards paying off your debts. This might not seem like a desirable outcome. But you won’t necessarily be forced to sell up.

    There are several factors to consider when you apply for an IVA as a homeowner

    white house under maple trees

    How Does an Individual Voluntary Arrangement Work in Practice?

    An IVA might sound like a complex process. The maths is actually quite simple and straightforward

    Our direct Insolvency Practitioner for the Debt Resolution Service Limited is Jason Bowen, who is licenced to act in the UK by the Institute of Chartered Accountants of Scotland – Licence no. 22150.  When you come to us in need of debt solutions, any specific IVA debt advice we provide will be given in anticipation of the appointment of Jason Bowen as your IP.  If for whatever reason Jason Bowen is unable to take the anticipated appointment, then your details may be referred to a suitable alternative IP to avoid any process delays or detriment. Where we refer you to one of our partners, we may receive a referral fee.

    How Does a Protected Trust Deed Work If You Live in Scotland?

    There isn’t a great deal of difference between getting an IVA in England, Northern Ireland and Wales or getting a Protected Trust Deed in Scotland.

    With an IVA, your assets – anything that can be converted in to cash – become the responsibility of your Insolvency Practitioner. At this point, you become shielded against any further pursuit or potential threats of legal action by your creditors.

    The key difference with a Protected Deed Trust is your Insolvency Practitioner must make separate application to protect your assets.

    It’s a technicality that otherwise follows much the same process and outcomes, such as:

    Read our entire section about Protected Trust Deeds here.

    Additional Things You Need to Know About

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