IVA: Individual Voluntary Arrangement Guide 2026
An IVA, short for Individual Voluntary Arrangement, is a formal debt solution for people in England, Wales and Northern Ireland. It lets you make affordable payments to a licensed Insolvency Practitioner, who distributes the money to your creditors. If creditors approve the proposal and you complete it, qualifying unpaid debts included in the IVA are written off.
An IVA can be powerful, but it is not a shortcut or a guaranteed debt write-off. It affects your credit file, appears on a public insolvency register, restricts borrowing, and can fail if payments are not maintained. Before entering an IVA, compare it with a Debt Management Plan, Debt Relief Order, bankruptcy, and free regulated debt advice. Our detailed comparisons explain IVA vs DMP and IVA vs DRO in more depth.
Source: Insolvency Service Individual Insolvency Statistics, March 2026 and December 2025 annual tables.
What is an Individual Voluntary Arrangement?
An Individual Voluntary Arrangement is a legally binding agreement between you and your creditors. It is governed by Part VIII of the Insolvency Act 1986 and can only be set up through a licensed Insolvency Practitioner.
In a typical IVA:
- You list your debts, income, spending and assets.
- The Insolvency Practitioner works out what you can realistically afford.
- Creditors vote on the proposal.
- The IVA starts if creditors representing at least 75% of the voting debt value approve it.
- You make one agreed payment, usually each month.
- Interest, charges and collection action on included debts are normally stopped.
- Qualifying unpaid balances are written off only if the IVA completes successfully.
GOV.UK describes an IVA as an agreement with creditors to pay all or part of your debts, with payments made to an Insolvency Practitioner who divides the money between creditors.
IVA at a Glance
| Question | Short answer |
|---|---|
| What does IVA stand for? | Individual Voluntary Arrangement |
| Where is it available? | England, Wales and Northern Ireland |
| Who sets it up? | A licensed Insolvency Practitioner |
| How long does it last? | Usually 5 years, or 6 years for many homeowners with equity |
| What creditor approval is needed? | 75% by value of voting creditors |
| Does it stop creditors? | Included creditors are bound once the IVA is approved |
| Does it affect credit? | Yes, usually for 6 years from the start date |
| Is it public? | Yes, it appears on the Individual Insolvency Register |
| Are fees payable? | Yes, but usually from your agreed IVA payments |
| Is debt write-off guaranteed? | No. It depends on approval and successful completion |
Is an IVA Right for You?
An IVA may be worth considering if you cannot repay your unsecured debts in full, but you can make a regular affordable payment and need legal protection from included creditors. It is most often used by people who have multiple unsecured debts and enough income to offer creditors more than they might receive through bankruptcy.
An IVA may fit if:
- You live in England, Wales or Northern Ireland.
- You cannot afford your normal contractual debt payments.
- You have more than one creditor.
- You have a regular income or a lump sum that could fund a proposal.
- You need a formal arrangement that binds included creditors.
- You understand the credit file, public register, borrowing and budget restrictions.
An IVA may not be suitable if:
- Your debts are low enough to repay informally.
- You can only afford a very small monthly payment.
- Your income is mainly benefits and another solution may protect you better.
- A Debt Relief Order would clear qualifying debts more cheaply.
- You work in a role where insolvency could breach contract or professional rules.
- You are not comfortable with annual reviews and strict budget controls.
- You live in Scotland, where IVA rules do not apply.
The safest next step is to compare all debt options before signing anything. MoneyHelper recommends speaking to a free debt adviser before entering an agreement.
IVA Eligibility Criteria
There is no single legal minimum debt level for every IVA. In practice, suitability depends on your debts, income, assets, creditors and the Insolvency Practitioner assessing your case. Many IVA providers use guide thresholds, but creditors decide whether the proposal is acceptable.
Common IVA suitability factors include:
You cannot keep up with normal repayments on debts such as loans, credit cards, overdrafts or arrears.
IVAs are usually designed for people who owe money to multiple lenders or organisations.
You can pay something meaningful each month after essential household costs.
Wages, self-employed income, pension income, benefits or a lump sum may be considered.
IVAs are for England, Wales and Northern Ireland. Scotland has separate solutions.
You must declare your income, spending, debts, assets and relevant changes honestly.
What Debts Can Be Included in an IVA?
An IVA is mainly used for unsecured debts. Always check your own debts with a qualified adviser because secured, priority and specialist debts can be treated differently.
Debts Often Included
Borrowing and credit
- Credit cards
- Personal loans
- Payday loans
- Overdrafts
- Store cards and catalogues
Household arrears
- Council tax arrears
- Gas and electricity arrears
- Water arrears
- Phone and broadband arrears
- Old rent shortfalls after a tenancy ends
Other unsecured debts
- HMRC debts
- Benefit overpayments
- Money owed to friends or family
- Business debts if you are a sole trader
- Mortgage shortfalls after repossession
Debts Usually Not Included
Secured and ongoing housing
- Current mortgage payments
- Secured loans if you keep the asset
- Current rent payments
- Some mortgage or rent arrears unless the creditor agrees
Court and family debts
- Magistrates' court fines
- Child maintenance arrears
- Child Support arrears
- TV Licence fines
Special categories
- Student loans
- Social Fund loans
- Certain car finance agreements
- Some debts created by fraud
Joint debts need special care. Your IVA can include your liability, but the other person can still be chased for the full joint balance. Read joint debts and IVA before applying if any account is shared.
IVA Costs and Fees
IVA fees are real, but they are usually taken from the monthly payments you already agree to make rather than charged upfront. A licensed Insolvency Practitioner must explain the fees before you agree.
Common IVA fee types are:
- Nominee fee: for preparing the IVA proposal and arranging the creditor decision.
- Supervisor fee: for running the IVA after approval.
- Disbursements: necessary case costs, such as registration or insurance-related costs.
The important question is not only “what are the fees?” but “how much will creditors receive, how much will I pay in total, and what happens if the IVA fails?” GOV.UK warns that an IVA can be cancelled if repayments are not kept up, and the Insolvency Practitioner may make you bankrupt.
IVA Application Process
The IVA process usually follows these steps:
- Debt advice and option check - Review whether an IVA, DMP, DRO, bankruptcy or another route is suitable.
- Income and budget review - Work out what you can afford after rent or mortgage, food, utilities, transport and essential living costs.
- Debt and asset check - Confirm creditors, balances, car finance, property equity, savings and anything else relevant.
- Proposal drafted - A licensed Insolvency Practitioner prepares the IVA proposal.
- Creditors vote - The IVA is approved if creditors representing at least 75% of the voting debt value agree.
- Payments begin - You make the agreed monthly or lump sum payment.
- Annual reviews - Your income, expenditure and circumstances are reviewed, usually every year. See our IVA annual review guide.
- Completion certificate - If completed successfully, qualifying remaining debts included in the IVA are written off.
You should not be pressured into signing quickly. A good provider will explain alternatives, fees, risks, what debts are excluded, and what happens if your circumstances change.
IVA Risks and Disadvantages
IVAs are often advertised around debt write-off, but the drawbacks matter just as much as the benefits.
| Risk | What it means |
|---|---|
| Credit file impact | The IVA normally stays on your credit file for 6 years from the start date. |
| Public register | Your details appear on the Individual Insolvency Register while active and for 3 months after completion. |
| Strict budget | Your spending is reviewed and your monthly payment can change if income rises. |
| Borrowing limits | You usually need permission to borrow more than the agreed limit, commonly £500. |
| Home equity | Homeowners may need an equity review or an extra year of payments. |
| Job or professional issues | Some contracts and regulated roles require disclosure or restrict insolvency. |
| Failure consequences | Creditors can resume action and may add interest or charges if the IVA fails. Read what happens if an IVA fails. |
| Fees paid first | Early payments can cover more of the IVA costs than the creditor balances. |
StepChange specifically warns that some bold IVA advertising claims may be misleading. Be cautious with promises such as “write off 90% of debt” unless the provider has fully assessed your finances.
How an IVA Affects Your Credit Score, Home and Job
Credit Score and Borrowing
An IVA is a form of insolvency and has a serious credit impact. It normally appears on your credit file for 6 years from the start date. During the IVA, obtaining new credit is restricted and mainstream lenders may decline applications.
After the IVA drops from your file, credit can improve gradually, but lenders may still ask whether you have ever been insolvent for some products such as mortgages.
Homeowners
An IVA is usually designed to avoid a forced house sale. Under the 2025 IVA Protocol key facts, homeowners are not normally required to sell or use equity directly, but where home equity is £10,000 or more, payments may last 6 years instead of 5.
Keep paying your mortgage and any secured loans unless your adviser tells you otherwise. Missing secured payments can put your home at risk outside the IVA.
Renting
An IVA does not automatically end a tenancy, but future landlords or letting agents may run credit checks. If your tenancy agreement mentions insolvency, get advice before proceeding. Read IVA and renting if you rent or expect to move during the IVA.
Employment
Most jobs are unaffected, but some roles need extra checks. Review your contract or professional rules if you work in financial services, legal services, accountancy, policing, security, senior management, or any role involving client money.
IVA vs DMP, DRO and Bankruptcy
No debt solution is best for everyone. The right route depends on your debts, income, assets, job, home, health and long-term plans.
| Option | Best suited to | Main advantage | Main drawback |
|---|---|---|---|
| IVA | People who can make affordable payments and need creditor protection | Legally binds included creditors and can write off qualifying unpaid debt after completion | Formal insolvency, credit impact, register, fees and failure risk |
| Debt Management Plan | People who can repay debts over time but need lower payments | Flexible and informal | Creditors do not have to freeze interest or stop action |
| Debt Relief Order | People with low spare income and assets who meet DRO rules | Low-cost formal solution with qualifying debts written off after the DRO period | Strict eligibility limits and restrictions |
| Bankruptcy | People whose debts cannot realistically be repaid and where asset/job impact is acceptable | Can clear debts faster than an IVA | Stronger asset, job, credit and public-register consequences |
| Trust Deed | Scottish residents with qualifying debts and income | Scotland-specific formal debt solution | Not available in England, Wales or Northern Ireland |
Read our detailed comparisons:
- IVA pros and cons
- IVA vs bankruptcy
- IVA vs DMP
- IVA vs DRO
- IVA and car finance
- IVA and renting
- Joint debts and IVA
- What happens if an IVA fails
- Debt Management Plan guide
- Debt Relief Order guide
- Trust Deed Scotland guide
IVA Statistics in 2026
The latest Insolvency Service statistics show IVAs remain one of the main formal debt solutions in England and Wales.
| Period | IVAs | Total individual insolvencies | IVA share |
|---|---|---|---|
| 2025 | 71,841 | 126,240 | 57% |
| 2024 | 67,087 | 117,958 | 57% |
| 2023 | 64,018 | 103,433 | 62% |
| 2022 | 87,848 | 118,752 | 74% |
| March 2026 | 7,075 | 12,252 | 58% |
The annual number of IVAs increased by 7% in 2025 compared with 2024, but remained below the record annual levels seen between 2019 and 2022. In March 2026, the IVA rolling rate reached 15.2 per 10,000 adults in England and Wales.
Statistics help show how common IVAs are, but they do not tell you whether an IVA is right for your situation. Suitability depends on personal advice.
How to Choose an IVA Provider
Before agreeing to an IVA:
- Check the Insolvency Practitioner on the official Insolvency Practitioner search.
- Check any debt advice firm on the FCA Register.
- Ask whether the firm gives advice directly or refers you to another company.
- Ask for all fees, failure risks and alternatives in writing.
- Be wary of claims that guarantee a specific percentage of debt write-off.
- Take free, independent debt advice if you are unsure.
You can also compare providers in our IVA companies guide and check likely suitability using our IVA calculator.
Frequently Asked Questions
What is an IVA?
An IVA is a legally binding agreement with your creditors to repay what you can afford, usually over 5 or 6 years, through a licensed Insolvency Practitioner.
How long does an IVA last?
Most monthly contribution IVAs last 5 years. Homeowners with equity may pay for 6 years instead, and some IVAs can finish early if creditors accept a lump sum.
Does an IVA write off debt?
An IVA can write off qualifying unpaid debts only after creditors approve the proposal and you successfully complete the IVA. The amount written off is not guaranteed before your finances are assessed.
Will an IVA affect my credit score?
Yes. An IVA normally appears on your credit file for 6 years from the start date and is listed on the Individual Insolvency Register while active and for 3 months after it ends.
Can I keep my house in an IVA?
An IVA is usually designed to avoid a forced sale of your home, but homeowners may need to address equity, commonly by making an extra 12 months of payments where qualifying equity exists.
Is an IVA available in Scotland?
No. IVAs apply in England, Wales and Northern Ireland. Scotland has different debt solutions, including protected trust deeds and the Debt Arrangement Scheme.
Ready to Compare Your Options?
If you are considering an IVA, use our free resources to understand the next step before committing to any payment plan:
- Use the IVA calculator to check whether an IVA may fit your circumstances.
- Compare IVA companies before choosing a provider.
- Read IVA pros and cons before signing an agreement.
- Understand IVA costs and what fees come from your payments.
Check Whether an IVA May Fit
Use the confidential eligibility form to compare whether an IVA could be suitable before you speak to a provider.
Start Your Free IVA CheckThis guide was compiled from official government sources, MoneyHelper, Citizens Advice and recognised debt charity guidance. It is general information, not personal debt advice. Last reviewed: April 2026.
Sources checked
- GOV.UK: options for dealing with your debts for the core IVA definition, creditor approval and responsibilities.
- GOV.UK: IVA Protocol key facts for fees, monthly payments, home equity, payment difficulty and register rules.
- Insolvency Service: March 2026 individual insolvency statistics for latest monthly IVA statistics.
- Insolvency Service: December 2025 annual statistics for annual IVA volumes and trend data.
- MoneyHelper IVA guide for free debt advice, debts included and how IVAs work.
- Citizens Advice IVA hub for user journeys before and during an IVA.
- StepChange IVA guidance for commercial-claim warnings, risks, benefits and provider trust checks.
- FCA Register and Insolvency Practitioner search for provider verification.