What is an IVA?

An IVA is a legal procedure for people struggling with their unsecured debts. It is a form of insolvency, which means the value of your total debts must be larger than the value of your assets for you to qualify.

Who is an IVA for?

For an IVA to be appropriate, your unsecured debts generally need to be more than £15,000.

Who arranges an IVA?

An insolvency practitioner (IP) arranges an IVA. They assess your finances and send a proposal for the IVA to all your creditors. For the IVA to go ahead, creditors representing at least 75% of your total debts must vote in favour of the proposal at a specially arranged meeting. If the IVA goes ahead, you are protected against any legal action your creditors could take to recover the debt, as long as you keep to the terms of the agreement.

How does the IVA work?

Under an IVA, you make monthly payments towards your total debt over a set amount of time, which is normally 5 years. In some cases you may also pay a lump sum towards your debts. These payments are based on what you can afford to pay.

If you have any equity in your property you may have to free this up to pay towards repayment of the your debt. An IP can provide you with more information about this.

Your finances are reviewed once a year and you and your creditors receive an annual progress report. At the end of the IVA, any remaining debt is written off.

How long does an IVA last?

The normal term for an IVA is 5 years. However, some lump sum payments can reduce the term considerably if accepted by your creditors.

How can you get IVA advice?

It is essential to get impartial, professional debt counselling before deciding upon an IVA, or any other debt solution.

Our online debt counselling services,CCCS Debt Remedy, can identify the most appropriate debt solution for your circumstances.

If an IVA is suitable for you, CCCSVA, our in-house IVA service, can support you throughout the process.