Apply for an IVA

Stop creditor action and consolidate all of your debts into one monthly affordable payment – from £80 per month

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An IVA is a formal agreement with the creditors that you owe money to. You will agree to make a low monthly payment for 5 years (60 months). In return, at the end of the 5 years; your creditors will agree to write off all remaining balances. Leaving you completely debt free.

Step One: Gather information related to your financial situation

Your Insolvency Practitioner will need to look through all of your financial information so they can properly review your financial position. You should collect all of this information together beforehand. You will need to provide details of your assets (such as properties, vehicles, savings and bank balances) and your liabilities (such as reference numbers of credit accounts). You and your Insolvency Practitioner will agree an affordable amount which you can repay for the term of the IVA (usually 5 years).

Step Two: IVA Proposal

Your Insolvency Practitioner will create an iva proposal to present to your creditors. In this proposal, it will outline your financial position and explain how much you are able to repay to the companies you owe money to. They will also include a report which will explain how likely it is that that the proposal will be successful.

The iva proposal will also contain full details of your income and expenditure alongside your assets and liabilities.

Step Three: Your Creditors will Consider the Proposal

Your Insolvency Practitioner will call a virtual creditors meeting. This is usually a telephone conference. Your creditors will be provided with a phone number and a pin code so they can attend the conference. Each creditor will receive a vote. The power of that vote depends on the percentage of debt they have within the total debt amount. For example, if you had 40% of your debt with a credit card company then their vote would be worth 40% of the overall vote. An iva needs 75% or over to be approved.

Step Four: The Result

If your creditors vote in favour of your iva then your IVA proposal will be approved.

If your creditors vote against your iva then your IVA proposal will be rejected. If this happens then your Insolvency Practitioner will review your situation and recommend the next best steps. This could mean that the iva proposal gets rewritten and proposed on different terms or it could mean that other options are discussed with you (such as bankruptcy or debt management).

How does an IVA work?

In a typical Individual Voluntary Arrangement:

  • You will make regular monthly payments based on what you can afford for 5 years.
  • A majority of your debts will be written off.
  • Your Insolvency Practitioner will handle all payments.
  • Your creditors will not be allowed to contact you, by law.
  • The interest and charges on your unsecured debts will be frozen so your debt amount does not get any higher.
  • After 5 years, all of your debts are written off.

Here’s the kicker:

  • Your creditors must approved your iva. See our IVA criteria.
  • You must be open and honest, and provide details when needed.
  • Your credit score will be impacted.
  • You will not be able to get any more credit whilst you are in your arrangement.
  • You will be registered as insolvent and placed on the Insolvency Register.

More questions? See our IVA FAQ.

iva Guide

Read our quick guide to applying for an Individual Voluntary Arrangement

There is no particular qualifying criteria for an iva set into law. But your circumstances should fit a criteria which it would make it beneficial to you to take out an iva.

This generally means you should have:

  • £6000 or more of unsecured debt
  • Owed to 2 or more people
  • A source of income
  • At least £80 per month left over to pay towards all of your debts

When you are an iva you can not apply for credit. When your iva has finished, you are free to apply for credit again.

An iva will usually cost from £80 per month for a period of 60 months (or 5 years).