What is an IVA and how does it work?

What is an Individual Voluntary Arrangement?

An IVA (Individual Voluntary Arrangement) is a legally binding agreement under Part VIII of the Insolvency Act 1986 (opens in a new tab) to repay all or part of your unsecured debts from affordable monthly payments, set up and supervised by a licensed insolvency practitioner.

Two roles run it. The nominee helps you draft the proposal and asks your creditors to decide on it. Once they approve, the nominee becomes the supervisor, who collects your payments and pays your creditors after taking fees (section 263 (opens in a new tab)). Only someone qualified to act as an insolvency practitioner can do either job (section 388 (opens in a new tab)). James Kaye and Nick Morgan are licensed insolvency practitioners, and they act as nominee and supervisor of IVAs for people in England and Wales.

An approved IVA binds every creditor who was entitled to vote on it, including any who voted against (section 260 (opens in a new tab)), and it stops those creditors taking action against you for the debts it covers (GOV.UK (opens in a new tab)). A mortgage lender or other secured creditor keeps its rights over the property it holds as security (section 258 (opens in a new tab)).

This guide describes protocol IVAs, which follow the IVA Protocol 2025 (opens in a new tab), the standard framework for consumer IVAs proposed from 1 July 2025. A bespoke IVA can set different terms, and IVAs in Northern Ireland follow different law.

Who can get an IVA?

There is no legal minimum debt for an IVA; the IVA Protocol 2025 (opens in a new tab) says a person suited to a protocol IVA will in most cases have multiple debts totalling £7,000 or more.

The £7,000 figure is only a guide. The same protocol expects, in most cases, a regular income other than state benefits and uncomplicated assets, and whether an IVA suits you also depends on your creditors. In Northern Ireland, which has its own rules, the guide figure is higher (nidirect (opens in a new tab)). The protocol also says an IVA is unlikely to suit you if you qualify for a debt relief order, or if a debt management plan would clear your debts over a similar period and pay your creditors significantly more. Before any proposal is drafted, your practitioner must explain every option open to you, including the ones we do not provide. You can see them side by side in every debt option compared.

If you are a sole trader with business debts, the protocol treats that as a sign a standard IVA may not fit, and a bespoke IVA can be considered instead.

Whether an IVA is right for you depends on a full look at your income, outgoings, debts and assets. A short questionnaire cannot tell you that, so we do not offer one.

How does an IVA work, step by step?

An IVA works in five stages: you talk to a licensed insolvency practitioner, they draft a proposal with you as nominee, your creditors vote on it (it is approved if three quarters or more, by value, of the creditors who respond vote for it), you make monthly payments that the practitioner supervises for the agreed term, and when it ends you no longer owe the debts it includes.

You do not have to apply to court for an interim order first: the nominee can report straight to your creditors (section 256A (opens in a new tab)). The steps below follow the IVA Protocol 2025 (opens in a new tab) and the voting rule (opens in a new tab). If you would like to know what to look for in whoever sets your IVA up, read how to choose an IVA provider. If you are already paying into an IVA with us, the guide for existing IVA clients covers payments, reviews and changes in your circumstances.

How do I apply for an IVA?

You apply for an IVA through a licensed insolvency practitioner, who checks whether an IVA suits you, prepares the proposal with you and puts it to your creditors for a vote (section 253 (opens in a new tab)).

To apply you give the insolvency practitioner proof of income, for example payslips or a P60, bank statements, details of your debts and details of any property or other assets. These are examples: the protocol sets no fixed list, because the nominee has to verify your income, spending, assets and debts in a way that suits your case (IVA Protocol 2025 (opens in a new tab)).

Fees apply if you go ahead with an IVA, and in a protocol IVA they come out of your monthly payments. Your practitioner explains them, with the risks and the other options, before you decide.

Why might creditors reject an IVA proposal?

Creditors reject an IVA proposal when fewer than 75% by value of the creditors who respond accept it, or when more than half by value of the creditors who are not associates of the debtor vote against it (rule 15.34 (opens in a new tab)).

Those are the voting rules that decide the outcome. Before the vote, the nominee's report tells your creditors whether the proposal has a reasonable prospect of being approved and carried out (section 256A (opens in a new tab)).

What does an IVA cost?

An IVA has a fee for the nominee who sets it up and a fee for the supervisor who runs it, and in a protocol IVA both are taken from your monthly payments instead of being paid upfront (Key facts (opens in a new tab)).

GOV.UK describes them as a set-up fee and a handling fee each time you make a payment (opens in a new tab). Your proposal must state the nominee's fees and how the supervisor's fees will be worked out (rule 8.3 (opens in a new tab)), so your creditors decide on them when they vote. A £15 fee for registering the IVA is set by law (opens in a new tab). Your first monthly payments go more towards the fees than towards your debts.

Your practitioner must explain the fees before you agree to the IVA, and ours set them out in writing in your proposal. Read how IVA fees are set and paid for the detail.

What are the risks of an IVA?

The main risks of an IVA are a mark on your credit file for 6 years, an entry on a public register, fixed payments for 5 or 6 years, and the chance of bankruptcy if the IVA fails because you cannot keep to its terms.

Weigh these against what an IVA does for you in the pros and cons of an IVA, or compare it directly in IVA or bankruptcy and IVA or a debt management plan.

• Fees come out of your payments first, so your creditors receive a smaller share in the early months (Key facts (opens in a new tab)).
• The IVA stays on your credit file for 6 years from the day it starts, which can make borrowing difficult. See how an IVA affects your credit file.
• It is listed on the Individual Insolvency Register, which anyone can search, until 3 months after it ends (GOV.UK (opens in a new tab)). Read how the insolvency register works.
• You cannot take on credit of more than £500 without your supervisor's written approval (standard terms (opens in a new tab)).
• If your income rises, or you receive an inheritance or another windfall, part of it goes into the IVA.
• If the IVA fails, creditors can chase you again, with interest and charges for the IVA period, and your supervisor or a creditor can ask the court to make you bankrupt (section 264 (opens in a new tab)). See what happens if an IVA fails.
• If you stop, you get no refund of what you have already paid, and anyone who shares a debt with you can still be chased for all of it.

How long does an IVA last?

A protocol IVA lasts 60 months, or 72 months if your share of the equity in your home is £10,000 or more, and it can run for up to 12 months longer to make up any payment holidays (IVA Protocol 2025 (opens in a new tab)).

Paying it off early is possible if enough money comes in to pay your creditors in full, with the fees. Read how long an IVA lasts and how it ends.

What happens to my home in an IVA?

In a protocol IVA you do not have to sell your home or release equity from it; if your share of the equity is £10,000 or more, the IVA runs for 6 years instead of 5 (Key facts (opens in a new tab)).

The equity is worked out as 85% of your home's value minus your mortgage and any other secured borrowing (IVA Protocol 2025 (opens in a new tab)). Keep paying your mortgage, because the IVA does not stop a secured lender from enforcing its security. Very high equity, a second property or a buy-to-let usually means a protocol IVA will not fit. Read more in IVAs for homeowners.

What happens to the rest of my debt when an IVA ends?

When your supervisor issues the completion certificate, you are released from all the debts included in the IVA (standard terms (opens in a new tab)).

That applies to protocol IVAs. In a bespoke IVA, what happens to the rest of the debt depends on the terms of the approved proposal. Either way, the release covers the debts in the IVA only: anyone who shares a debt with you can still be asked to pay it, and a secured lender keeps its rights over your home (Key facts (opens in a new tab)). We do not quote how much of your debt an IVA might write off, because that depends on your own figures.

How will an IVA affect my day-to-day life?

An IVA affects your life mainly through a fixed monthly budget for five to six years, a credit file entry for six years from the start date, and a public entry on the Individual Insolvency Register until three months after it ends (Key facts (opens in a new tab)).

You can go on holiday during an IVA if the cost is paid from the household budget agreed with your supervisor, not from money that should go to your creditors (IVA Protocol 2025 (opens in a new tab)). No protocol term bans holidays, but borrowing more than £500 for one needs your supervisor's prior written approval (standard terms (opens in a new tab)).

Creditors bound by an approved IVA cannot take enforcement action, such as sending bailiffs, for the debts included in it. Secured creditors, such as a mortgage lender, keep their security, and debts outside the IVA are not covered (standard terms (opens in a new tab)). For borrowing during and after an IVA, see an IVA and your credit file.

Will my IVA supervisor see my bank accounts?

Your insolvency practitioner checks your income, spending, assets and debts when the proposal is prepared, and your supervisor can ask for bank statements and other evidence during the IVA and at each annual review (standard terms (opens in a new tab)).

You must give accurate information about everything you own and owe. The protocol says a failure to do so could lead to criminal proceedings as well as the end of the IVA (IVA Protocol 2025 (opens in a new tab)).

Will an IVA affect my job?

Whether an IVA affects your job depends on the role: for example, the FCA's fit and proper test (opens in a new tab) considers arrangements with creditors, the SRA treats an IVA as a financial event when assessing solicitors (opens in a new tab), and a person in an IVA cannot be a charity trustee (opens in a new tab) until discharged; check your contract or your professional body's rules.

An IVA does not appear on a DBS check, because DBS checks show criminal record information (opens in a new tab), not insolvency records, but some regulated jobs ask about insolvency separately. That is the position in England and Wales; Scotland and Northern Ireland have their own checking bodies.

Can I be a company director during an IVA?

An IVA does not disqualify you as a director under the Company Directors Disqualification Act (opens in a new tab), unlike bankruptcy, but the model articles (opens in a new tab) many private companies use end a director's appointment when a composition is made with their creditors generally, which can include an IVA, so check your company's articles before you enter one.

The law describes an IVA as a proposal for a composition or a scheme of arrangement (section 253 (opens in a new tab)). Whether yours counts as a composition is a legal question your insolvency practitioner can answer from your proposal.

Can I get a joint IVA with my partner?

Couples can each propose their own IVA and the two can run as interlocking IVAs, because an IVA is an arrangement for one individual; a joint debt can still be pursued against a partner who is not in an IVA (Key facts (opens in a new tab)).

Where you own your home together, the protocol looks at each person's share separately, and the £10,000 equity test applies to each share on its own (IVA Protocol 2025 (opens in a new tab)).

Will my partner have to pay towards my IVA?

Your partner does not have to pay your debts in an IVA, but their income is usually taken into account when the household budget and your contribution are worked out (IVA Protocol 2025 (opens in a new tab)).

If the budget is agreed for you alone, the proposal has to explain why. Only debts in both your names can be pursued against your partner (Key facts (opens in a new tab)), and their credit file should be linked to yours only through joint credit, such as a joint account (ICO (opens in a new tab)).