An IVA is a form of insolvency. To qualify for an IVA, you will need some income in order to make monthly payments towards your debts over a set period of time, which is usually 5 years. Alternatively, you can enter an IVA by offering to pay your creditors a lump sum of money.

An Insolvency Practitioner (IP) sets up your individual voluntary arrangement on your behalf. First, they assess your finances and then draw up a proposal for your creditors. Under this proposal, all your available income (after you have paid your essential household bills and expenses) will go towards the monthly payments to be divided between your creditors. In some cases, a lump sum is also payable. At the end of the 5-year period, any remaining debt is written off.

IVA creditors’ meeting

Under UK insolvency law, before an IVA goes ahead, a creditors’ meeting needs to be called. At this meeting, your creditors vote on whether or not to accept your IVA proposal. If creditors representing at least 75% of your total debt vote in favour of the proposal, the IVA can go ahead.

There are fees payable for IVAs, but these are included in the overall debt and paid off though your monthly instalments. As long as you keep to the terms of your IVA, creditors will not be able to take any court action against you to recover the money you owe.

Your IP reviews your finances on an annual basis and a progress report is sent to you and your creditors. You will receive notification when the IVA comes to an end.

IVA help and advice

As the UK’s leading debt help charity, we can provide free, professional and impartial advice on IVAs and all other debt solutions.

Our online service CCCS Debt Remedy can identify whether an IVA is suitable for your situation. If that is the case, CCCSVA, our IVA service, can support you throughout the process.