Home » Debt Solutions » Individual Voluntary Arrangement (IVA)

What is an IVA?

An Individual Voluntary Arrangement (IVA) is an agreement reached between you and your creditors to repay the money you owe over a set period of time. 

IVAs are formal and legally binding. Once you enter one, your creditors aren’t permitted to contact you directly. Instead, all contact goes through your debt management company or Insolvency Practitioner (IP).

After making repayments for a set period of time, usually 5 or 6 years, any remaining debt is officially written off.

Is an IVA right for me?

If you have debts exceeding £6,000 and a stable monthly income, but you‘re struggling to make your monthly repayments, then an IVA could allow you to manage your debts with a more affordable, set monthly amount.

When should I consider an IVA?

An IVA could be right for you if you are:

  • Worrying about money
  • Struggling to pay your household bills
  • Concerned about creditor contact
  • Relying on your overdraft or credit card
  • Missing repayments or getting into arrears

Are you eligible for an IVA?

Our expert debt advisors will be able to tell you everything you need to know about debt solutions and eligibility criteria. For an IVA, you’re usually:

  • Insolvent, meaning you are currently unable to pay back the money you owe
  • With at least £80 in spare income each month that can be paid towards your debts
  • Have a minimum total debt of £6000
  • Owing money to at least two separate creditors
  • A resident of England, Wales, or N. Ireland

IVA pros & cons

IVA Pros

  • IVAs can be used to write off significant amounts of debt
  • The monthly payments are affordable
  • You are protected from legal action
  • Your creditors can’t contact you directly

IVA Cons

  • An IVA will impact your credit score
  • Creditors are under no obligation to agree to an IVA request
  • Only unsecured debts are included. Any other debts will remain outstanding
  • IVAs are recorded on a public register

How to apply for an IVA

If you want to apply for an IVA or find out what other solutions could be available, get in touch and one of our friendly advisors will:

Review your current debts and financial situation, then give you all the information to make the right choice for you.

If you decide an IVA is the best option for you, MoneyPlus will help you with the setup process.

Once set up, we will review your application and send the IVA request to your creditors.

What debts does an IVA cover?

An IVA covers most unsecured debts, which means debts that are not tied to assets (usually your home). These can include:

  • Household bills
  • Council tax
  • Credit cards
  • Personal loans
  • Overdrafts
  • Payday loans
  • Buy now, pay later debts

An IVA stops all legal action & contact from creditors.

What debts can’t be included in an IVA?

An IVA typically includes most unsecured debts. Any debts that are tied to assets, like your house, will not be covered in an IVA.

  • Mortgages
  • Debts incurred through fines
  • Student loans
  • Court fines
  • Social fund fines
  • Hire purchase agreements
  • Child support arrears

The day-to-day with an IVA:

As an IVA is often a long-standing agreement, over multiple years, it’s important to understand how living with an IVA will affect you. Your creditors will expect you to keep your expenses to reasonable levels ensuring you pay back as much as you can towards your debts.

How an IVA affects your finances

In an IVA, your monthly debt repayments will be vastly reduced. This will, hopefully, free up more of your monthly income and allow you some financial respite from your current debts.

How an IVA affects your job

In most instances, having an IVA won’t affect your current employment.  Though it’s always good to read over your contract before going forward.

How an IVA affects your home

Your home will be considered when applying for your IVA.  Under the arrangement, it’s unlikely you will be made to sell your home. However, the IP will review any equity in your home, and you’ll probably be required to remortgage and release any available equity.

Example IVA

See how an IVA could make a difference to you…

Bank Loans £14,000
Credit Cards £2,442
Payday Loan £900
Overdraft £2,474
Total amount owed £18,798

Using our average debt write-off

Total debt:

Debt written off:



Total repaid £5,075
🎉 Reduced by 73%

*From  April 2022 to April 2023 1 in 3 customers achieved a debt write off over 80%, with average write off being 73%. The amount of debt written off is dependent on your circumstances.

How an IVA affects mortgages & renting


If you have a mortgage when you enter into an IVA, you will be expected to re-mortgage and release any equity to pay towards your debts. Your IVA can be extended by 12 months if no re-mortgage is available.

Being in an IVA will make it difficult to get a mortgage. In most instances, it’s often better to wait until the IVA is no longer recorded on your credit file before applying. Though there are specialist lenders who will be more likely to consider your offer, you probably won’t get access to the best rates as a result of your credit score.


In most instances, being in an IVA shouldn’t affect your current renting contract, though we always advise checking contracts for any relevant clauses. As your credit rating will be affected by an IVA, this may become a concern for future landlords when running a credit check. These concerns can be offset if you are either renting with another person or can find someone to become your guarantor during the application process. In these situations, we always encourage honesty with your prospective landlord, as they may be more understanding if given the full context.

Will an IVA stop bailiffs?

If you have any outstanding court actions including the use of a bailiff, they will be stopped once an IVA has been put in place. This means that bailiffs will no longer be able to attempt collections to repay any debts included in an IVA.

It’s made a big difference to me and how I live.

— Helen, Aberdeenshire
Read Helen’s story…

Do creditors have to accept Individual Voluntary Arrangements?

Once an IVA proposal has been drawn up, your Insolvency Practitioner will contact all of your creditors. Creditors don’t have to accept the proposal but an IVA will go ahead providing 75% of the creditors who responded are happy with the proposal.

What’s the difference between an Individual Voluntary Arrangement and Bankruptcy?

Both solutions are forms of insolvency and you’ll need to pay a fee to enter into either of them. Your name will be recorded on the public insolvency register and a record will stay on your credit file for a minimum of 6 years.

The main differences are that an IVA can offer more protection if you are a homeowner or have other assets you would like to keep safe. An IVA usually involves making reduced monthly payments for a 5 or 6 year period, whereas Bankruptcy usually completes in 12 months, but rarely protects any assets.

With an IVA, you’d need to have a surplus income of around £100+ a month, whereas Bankruptcy only requires you to cover the Bankruptcy fee itself, plus any court fees.

Can you pay off an Individual Voluntary Arrangement early?

If your circumstances change or you receive a large windfall whilst completing your IVA, you may be able to settle early.

Your Insolvency Practitioner (IP) will make the offer by writing a proposal that they put to your creditors. This is called Variation, and for it to go ahead, a minimum of 75% of creditors that respond have to agree to it.

What happens at the end of my Individual Voluntary Arrangement?

When you apply for an IVA, it can be hard to see the end goal, but the last year of your IVA is an exciting time. As you’re approaching the end of a 5 or 6 year period sticking to a budget and keeping up your monthly payments, the end is in sight and you’re almost debt free! Unsecured debts not included in the IVA will however remain outstanding.

Your Insolvency Practitioner (IP) will check that all payments have been made on time and in full, and once confirmed, you will receive an IVA completion certificate. You won’t have to notify creditors, but we do recommend checking the public insolvency register and querying it if you haven’t been removed 3 months after completion.

I really cannot speak too highly of MoneyPlus, they literally saved my life.

— Stuart, Norfolk
Read Stuart’s story…

What happens if an Individual Voluntary Arrangement fails?

An IVA is a legally binding contract between you and your creditors, failing to make your payments under your agreed-upon terms, could see your IVA terminated and allow your creditors to contact you for payments. Luckily, there are many steps taken before an IVA fails and there are ways that we can help, including reviewing payment terms and offering additional support and advice. As always it’s best to speak to our team when struggling with repayments for the best chance to get ahead of your debts.

If an IVA fails, creditors are owed the total amount of debt that remains outstanding and will be free to contact you, and even ask the courts to make you bankrupt. To avoid bankruptcy, it’s important to contact all creditors as soon as possible should the IVA fail, to renegotiate payment plans.

Can I change from a Debt Management Plan to an Individual Voluntary Arrangement?

MoneyPlus Advice will review DMPs at least every 12 months and if it looks like an IVA may be an available solution you can start the application process.

If you are on a DMP and think that an IVA may be more suitable for you, please contact us on 0161 837 4000 and speak to our team who will be happy to help.

What’s the difference between a Debt Management Plan and an Individual Voluntary Arrangement?

Debt Management Plans (DMPs) and Individual Voluntary Arrangements (IVAs) both allow you to make affordable monthly payments to creditors under the terms of an agreed plan. However, there are differences between these two solutions. 

For example, whereas an IVA is legally binding, a DMP isn’t. With an IVA, creditors can’t take legal action against you once they’ve agreed to the terms. They’re also prevented from contacting you directly. Instead, they have to go through your Insolvency Practitioner (IP). Another difference is that IVAs allow you to write off some of your debt, whereas DMPs don’t.

Why choose MoneyPlus Advice?


Based on our numbers up to May 11th, we’re expecting to give debt advice to over 14,000 people this year!

1 million +

For our most vulnerable customers, we successfully fought for £1,042,722 of unmanageable debt to be written off.


We save our Debt Management Plan customers on average £240 each month in Interest & Charges.

How it works

At MoneyPlus, we aim to make life as easy as possible. That’s why we take care of as much of the work for you as we possibly can. If you qualify for our DMP services, here’s what will happen next:

Talk to us.

Talk to us in complete confidence about your financial situation and the debts you are struggling with. 

Find a solution.

Based on the information you give us, we will create a plan that will help you get out of debt, whether that includes our services or not.

Choose your plan.

We will get in touch with your creditors on your behalf to notify them that you are with MoneyPlus. Alternatively, we will ensure that you know who can help.

Alternatives to an IVA

Debt Management Plan

A Debt Management Plan is an informal agreement that you come to with your creditors to repay the money you owe them without taking on further debt. You do this by making affordable monthly payments.

Debt Relief Order (DRO)

A DRO may be a suitable solution for those with debts of less than £30,000 (£20,000 in Northern Ireland) and less than £75 a month in disposable income.

Protected Trust Deed

Designed for residents of Scotland, a Protected Trust Deed is a type of formal debt solution that combines debts into one single monthly payment.

Debt Consolidation Loan

Rather than make multiple payments to your creditors, a Debt Consolidation Loan allows you to pay off your unsecured debts by making one monthly payment.

Are you ready to find your debt solution?

  • Affordable monthly payment
  • Stop creditor contact 
  • Stop interest and charges

You can also contact us for IVA advice and to discover more about our IVA services.