Consumer Individual Voluntary Arrangement (IVA)

There's a solution to individual debt issues that doesn’t involve bankruptcy and will allow you to hold onto your major assets like your family home - it’s a Consumer Individual Voluntary Arrangement (IVA).

The Consumer IVA is still a formal legal agreement between you and your creditors overseen by an Insolvency Practitioner but it allows you to pay off your debts in a manageable, regular format.

Frequently asked questions about IVAs

There are several reasons why you might consider entering into an IVA.

  • You might have received a statutory demand or been threatened with bankruptcy by a creditor
  • You’ve received a large tax penalty from HMRC or are unable to settle any other official tax debt
  • If you work in an occupation such as accountancy or as a solicitor where bankruptcy would bar you from the profession, an IVA would allow you to continue working
  • You might already be managing multiple repayment plans with additional interest mounting up - an IVA allows you to combine all debts into one manageable payment plan with interest being frozen
  • You might already be in a debt management plan and an IVA would bring closure and finalty to dealing with creditors
  • If you are already bankrupt and undischarged, an IVA can be a way of annulling your bankruptcy

So how does an IVA work?

The first thing you need to do to formally set up an IVA is to engage an insolvency practitioner like ourselves.

Any IVA has to be agreed with creditors and managed by a professional insolvency practitioner. All our fees are open, clear, transparent and agreed in advance so there are no surprises later.

We’ll have a meeting and the first thing we’ll look at is if an IVA is the most appropriate way forward for you. There might be other options that would serve you and your creditors better.

If you decide this is the right option then we’ll prepare your IVA proposal for you.

We collect various documents to create it including a full list of creditors, the details and amounts of debt owed and their contact details. We’ll also need proof of your monthly income and expenditures as well as details of other assets like your home situation, car and any other facts that have a bearing on your overall financial situation.

Next we prepare for your IVA presentation and creditor vote.

We send copies of your IVA proposal to your creditors in advance as we need to secure a 75% majority vote in favour for it to pass and become binding.


A virtual meeting is held to determine the outcome with creditors voting postally or electronically.


If the IVA passes then the proposal becomes a legally binding contract and your monthly repayments begin. We’ll review your financial situation annually as the supervisor of the IVA and if your circumstances change - for better or worse - we can look at renegotiating your proposal to better reflect the reality of your situation. This could also include allowing for any equity growth if you are a homeowner.


Once the IVA is completed, any remaining debt classed as unaffordable in the initial proposal is written off.

What are the benefits?

  • All creditor actions are suspended including debt interest and bailiff visits
  • Once agreed all parties are committed to and tied by the terms
  • IVA proposals are realistic as they are based on affordability rather than the overall amount owed
  • One clear monthly payment rather than several
  • You’ll often be able to retain your home and/or car - mortgage repayments are counted in outgoings when determining IVA repayments
  • When the IVA is completed any outstanding debt is written off for good

Any negatives?

  • An IVA is a binding legal contract and there are consequences for breaking it
  • It will impact negatively on your credit rating - an IVA will stay on your credit file for six years from the beginning of the agreement
  • If you own your home you may have to remortgage to contribute towards debts when nearing the end of the IVA
  • Student loans, child maintenance, fines and other secured debts aren’t included in IVA debts - although they can be taken into account when establishing affordability
  • 75% of creditors have to approve an IVA - if they doubt you’d be able to afford the monthly repayments they may vote against it