Everything you need to know about IVAs

Our IVA pages will explain everything you need to know and what you need to consider when thinking about an IVA.

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What is an IVA?

An Individual Voluntary Arrangement (IVA) is an agreement made with your eligible creditors to address your unsecured debts. You are required to make monthly payments to your arrangement (normally for a period of five years). Once the IVA successfully completes the remaining debt is written off. Although various types of unsecured debts can be included on an IVA there are some exclusions. Any debts that are not included within an IVA will still need to be paid as normal.

How does an IVA work?

A full review of your financial circumstances will be completed. Should you believe an IVA is the most appropriate solution for you we will prepare an IVA proposal.  We will present this to your creditors who can vote on whether to reject or accept the proposal.

You will need 75%, by value, of the creditors who vote to vote in favour of the proposal for it to be approved. Following the acceptance of the IVA we will manage contact with your creditors.

During the IVA period you may still receive annual statements from creditors. If the IVA proposal is rejected it may be possible to re-submit the proposal should your circumstances change. Alternatively we can assist you in considering alternative solutions.

How do I qualify for an IVA?

You must have a minimum of £5,000 worth of eligible debt – by this we mean debt that can be included in an IVA. You must owe at least two creditors and have an available monthly disposable income of at least £70.

A number of debts can be included on an IVA with the exceptions of student loans, court fines, child maintenance arrears and secured debts, although other exclusions may apply.

Other organisations may have slightly different qualifying thresholds to ours (such as higher or lower requirements on disposable income). If you are in any doubt about this we would highly recommend getting in touch or using our call back service to discuss this further. IVAs are not available in Scotland – see our Protected Trust Deeds section, which is suitable for Scottish residents.

Is an IVA right for me?

As with any insolvency process there are consequences of entering into an IVA. These include:

  • An IVA may have a negative effect on your credit score for up to six years after the IVA is accepted.
  • If you are a homeowner you may be required to release equity in the final year of the IVA through remortgaging.
  • You may need to make additional payments within an IVA for 12 months to cover any equity value if you are unable to remortgage.
  • If you fail to keep up-to-date with payments, during an IVA, the IVA may fail which could lead to bankruptcy.
  • IVA details are made public on a register.


All the answers you may need about IVAs can be found here. Although this may help you understand more about an IVA we strongly advise that you seek qualified financial advice before entering in to any agreement. Even if it isn’t from us – but we’re here to help.

What if my personal circumstances change during an IVA?

If your circumstances change, either for the better or worse, you must tell us immediately.

IVA cost – what and how we charge for our services

Understanding this can be quite overwhelming. So it’s best to split this in two sections; a) your fees b) the costs you pay to creditors.

The IVA Fees:

The Nominee Fee – This fee covers the IVA set-up cost which includes drafting of the proposal, arranging the meeting of creditors and other administrative work as part of the process. This fee is usually the equivalent of your first five monthly payments once the IVA is approved subject to a minimum of £1,000.

The Supervisor Fee – This is normally 15% of each monthly payment made to your creditors after the Nominee fee has been paid. This will cover the work of your Insolvency Practitioner to distribute payments, manage your IVA creditors and maintain their statutory obligations as per the IVA proposal.

Costs and Disbursements – the monthly payment and what it covers

Each month you will be responsible for paying a set amount to service the debts contained within your IVA. This will be a minimum of £70. Other costs, known as disbursements, are paid for additional things such as registering the IVA, insurance (for the money you contribute on a monthly basis) and other costs such as legal or valuation fees should you need to release the equity in your home. These costs are paid out of your monthly contributions.

An example of the costs and fees

This is an illustrative example, based on £31,000 of unsecured debts on a five year IVA without equity in a property while paying £300 per month. (£18,000 in total over 60 months)

The Nominee’s fee (typically equivalent to first 5 contributions): £1,500

The Supervisor’s fee*: £2,475

The Supervisor’s costs**: £1,000

Total returned back to creditors: £13,025 (42% of £31,000)

Total written off  by borrower: £17,975 (58% of 31,000)

*15% of further monthly payments once the Nominee’s fee has been satisfied

** Bond fee £50, DTI Fee £15, plus other case dependent costs.

How much does an IVA cost?

There is a setup cost and an ongoing monthly cost. The monthly payment is calculated by the value of your essential bills and qualifying priority debts being deducted from any monthly income. On top of the setup costs there are minimum monthly contributions which start from £70 per month but actual payments depend on your affordability and may be higher.

How does an IVA affect my credit rating?

An IVA will stay on your report for six years once you enter it. This will affect any future applications for credit while it stays on your credit report and may have long term effects if you are asked to disclose any previous insolvency periods when applying for future credit.

How long does an IVA last?

An IVA normally lasts for five years. When coming towards the end of an IVA, as a homeowner, you may be asked to release the equity in your property by remortgaging. If you unable to re-mortgage, your IVA may be extended by 12 months.

What debts are excluded from an IVA?

Debts excluded from an IVA include, but are not limited to the following:

  • Child Maintenance arrears
  • Mortgage and mortgage arrears
  • Secured loans
  • Car finance while you still own the vehicle
  • Rent arrears
  • Court fines
  • Student loans
  • Utility bills with any current provider

What happens to my creditors?

Any of your creditors, whose debts are to be included in the IVA, will be told that you making a proposal to enter into an arrangement. If it is agreed they are bound by the terms of the IVA. Any communication is also handled through us with the exception of any obligatory announcements and key statements.

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