What Is an IVA UK - Individual Voluntary Arrangement Guide 2026

Understand how an Individual Voluntary Arrangement works, who qualifies, how much it costs, the advantages and disadvantages, and how an IVA affects your credit score, mortgage and financial future.

An Individual Voluntary Arrangement (IVA) is a formal debt solution that allows eligible individuals to repay part or all of their unsecured debts through an agreed repayment arrangement with creditors.

For people struggling with credit card debt, personal loans, overdrafts and other financial commitments, an IVA may provide a structured alternative to bankruptcy.

However, entering an IVA is a significant financial decision. It can affect your credit history, access to borrowing, mortgage applications and ability to manage future financial commitments.

In England, Wales and Northern Ireland, IVAs are legally binding arrangements supervised by licensed insolvency practitioners. They are not available in the same form in Scotland, where different debt solutions apply.

For homeowners and landlords, understanding how an IVA affects property equity, mortgage payments and ownership is particularly important.

Fraser Bond, a UK property agency and real estate consultancy, supports buyers, sellers, landlords and investors with residential property transactions, valuations, lettings and property management across London and the wider UK.

This guide explains what an IVA is, how it works, who qualifies, its advantages and disadvantages, and the potential consequences for property owners and tenants.

What Is an IVA?

IVA stands for Individual Voluntary Arrangement. It is a formal, legally binding agreement between an individual and their creditors to repay debts under an agreed plan.

An IVA is arranged and supervised by a licensed insolvency practitioner.

The arrangement typically involves making affordable monthly payments over an agreed period, often five or six years.

In some circumstances, an IVA may involve a lump-sum payment instead of regular instalments.

If the IVA is completed successfully, qualifying unpaid debts included in the arrangement are normally written off.

However, not every type of debt can be included, and the arrangement may fail if the borrower does not comply with its terms.

How Does an IVA Work?

The process usually involves assessing your financial circumstances, preparing a repayment proposal and seeking creditor approval.

The main stages are:

1. Financial assessment: Your income, living expenses, debts and assets are reviewed.

2. IVA proposal: A licensed insolvency practitioner prepares a repayment arrangement.

3. Creditor voting: Creditors consider whether to accept the proposal.

4. IVA approval: The arrangement becomes legally binding if the required creditor majority agrees.

5. Monthly payments: You make the agreed contributions.

6. Regular reviews: Your financial circumstances may be reassessed.

7. Completion: Qualifying remaining debts are generally written off after successful completion.

An IVA is not simply an informal repayment plan. It is a statutory insolvency arrangement with legal consequences.

Who Qualifies for an IVA?

An IVA may be suitable for someone who has unsecured debts they cannot reasonably repay in full but can afford regular contributions towards them.

Typical considerations include:

• Having multiple unsecured debts.

• Having a reliable source of income.

• Being unable to maintain contractual debt repayments.

• Having sufficient disposable income to make IVA payments.

• Being willing to disclose assets and financial circumstances.

• Having creditors who are prepared to accept the proposed arrangement.

There is no universal statutory minimum debt amount for an IVA. However, relatively small debts or very limited disposable income may make other solutions more appropriate.

How Much Debt Do You Need for an IVA?

There is no fixed legal minimum or maximum debt amount.

Some IVA providers use commercial eligibility thresholds, but these are not statutory requirements.

For example, a person with £20,000 in unsecured debts and sufficient disposable income may be considered for an IVA.

Someone with £3,000 in debt might be better served by a less expensive arrangement.

The appropriate solution depends on affordability, assets, debt types and individual circumstances.

What Debts Can Be Included in an IVA?

An IVA can cover many common unsecured debts.

Priority bills and ongoing commitments still need to be managed carefully.

An IVA does not automatically prevent action concerning mortgage arrears or unpaid rent.

How Long Does an IVA Last?

An IVA commonly lasts five or six years.

Under the 2025 Consumer IVA Protocol, homeowners with at least £10,000 of equity in their home generally make payments for six years rather than five.

This protocol approach does not normally require the homeowner to sell the property or release equity through remortgaging.

Other IVA arrangements may have different terms, so the actual proposal must be reviewed carefully.

How Much Do You Pay Each Month on an IVA?

Payments are based on an assessment of income and reasonable living expenses.

For example, if an individual has £1,800 in monthly income and £1,650 in allowable essential expenditure, they may have £150 available for debt repayments.

An IVA proposal could use that amount as a starting point, subject to creditor agreement and the insolvency practitioner's assessment.

Example IVA Repayment

This example does not mean creditors necessarily receive £9,000. Insolvency practitioner fees are normally deducted from contributions.

The amount written off depends on the final approved arrangement and successful completion.

What Are the Advantages of an IVA?

An IVA may offer several benefits.

• One structured payment towards included debts.

• Protection from creditor enforcement action for covered debts.

• Interest and charges on included debts generally frozen under the arrangement.

• A potential write-off of qualifying remaining debt.

• An alternative to bankruptcy.

• A defined repayment framework.

• The possibility of retaining assets, including a home, subject to the terms.

These benefits must be considered alongside the restrictions and risks.

What Are the Disadvantages of an IVA?

An IVA also has significant drawbacks.

• It normally lasts five or six years.

• It negatively affects credit history.

• Insolvency practitioner fees reduce payments reaching creditors.

• It may restrict access to new credit.

• Income increases and windfalls may affect contributions.

• It can make mortgage applications more difficult.

• Failure can leave debts outstanding and expose the borrower to further enforcement.

• It is recorded on a public insolvency register while active.

An IVA should not be entered into solely because it is advertised as a way to write off debt.

Does an IVA Affect Your Credit Score?

Yes.

An IVA normally remains on your credit file for six years from the date it begins.

This can make it harder to obtain personal loans, credit cards, mortgages and other financial products.

Even after the IVA is completed, lenders may consider previous insolvency history when assessing applications.

Can You Get a Mortgage With an IVA?

Obtaining a mortgage during an active IVA is generally difficult.

Many mainstream mortgage lenders are reluctant to lend to applicants with ongoing insolvency arrangements.

Some specialist lenders may consider applicants after an IVA has been completed, depending on the time elapsed, deposit, income and credit history.

Mortgage eligibility is not guaranteed.

What Happens to Your House if You Get an IVA?

An IVA does not automatically mean you must sell your home.

Under the 2025 Consumer IVA Protocol, qualifying homeowners with £10,000 or more in equity generally make an additional year of payments rather than being required to release equity.

However, bespoke or older arrangements may contain different provisions.

Homeowners should check their actual IVA agreement before making decisions about refinancing or selling.

Mortgage repayments must normally continue separately.

Can You Sell Your House While in an IVA?

Potentially, but selling a property during an IVA may affect the arrangement.

The insolvency practitioner may need to be consulted, and some or all of the sale proceeds may be required under the agreement.

A property sale could also change the amount available to creditors.

Homeowners should obtain advice before marketing a property or committing to a sale.

Can You Rent a Property With an IVA?

Yes, but an IVA may make some rental applications more difficult.

Letting agents and landlords may undertake affordability and credit checks.

An applicant with an active IVA may be asked to provide a guarantor or additional evidence of income.

An IVA does not automatically prevent someone from entering a tenancy.

Can an IVA Stop Eviction?

Not necessarily.

An IVA does not automatically protect a tenant against eviction for rent arrears.

Landlords may still pursue possession where the relevant legal grounds exist.

Tenants should prioritise current rent payments and seek specialist debt and housing advice if arrears have accumulated.

IVA vs Bankruptcy

Bankruptcy discharge does not necessarily end every financial obligation, and bankruptcy can have serious implications for property ownership.

IVA vs Debt Management Plan

A Debt Management Plan (DMP) is generally an informal repayment arrangement.

Unlike an IVA, it does not automatically bind creditors or guarantee that interest will stop.

A DMP may offer greater flexibility, but repayment can take longer.

An IVA provides stronger legal protection for included debts but involves more formal restrictions and costs.

IVA vs Debt Relief Order

A Debt Relief Order (DRO) is another insolvency solution available in England, Wales and Northern Ireland, subject to eligibility rules.

It is generally intended for people with relatively low assets and limited disposable income.

Unlike an IVA, a DRO does not require monthly payments towards included debts.

The appropriate choice depends on income, assets, total debt and eligibility.

What Happens if You Miss an IVA Payment?

If you cannot make a payment, contact your insolvency practitioner immediately.

Depending on the circumstances, a payment break or revised arrangement may be possible.

However, repeated missed payments or failure to comply with the terms may cause the IVA to fail.

If the arrangement fails, creditors may resume recovery action, and the borrower could still owe substantial debts.

What Happens When an IVA Finishes?

Once all obligations have been met, the insolvency practitioner issues a completion certificate.

Qualifying unpaid balances included in the IVA are normally written off.

The IVA is generally removed from the Individual Insolvency Register three months after it ends.

Its credit file entry normally remains for six years from the original start date.

Can You Pay Off an IVA Early?

Potentially.

A borrower may propose an early settlement, sometimes using money provided by a third party.

However, creditors and the insolvency practitioner may need to approve the proposed variation.

Paying a lump sum does not automatically guarantee that creditors will accept an early completion.

Can You Cancel an IVA?

An IVA is legally binding once approved.

It cannot simply be cancelled without consequences.

Ending an IVA prematurely may allow creditors to resume debt recovery and claim outstanding balances, interest or charges.

Anyone considering cancellation should obtain independent advice before taking action.

Where to Get Free IVA Advice

Before entering an IVA, consider speaking with an independent debt advice organisation.

Free guidance is available from Citizens Advice, StepChange Debt Charity, National Debtline and MoneyHelper.

A qualified adviser can assess whether an IVA, DMP, DRO, bankruptcy or another arrangement is appropriate.

Frequently Asked Questions About IVAs

Is an IVA a good idea?

It can be suitable for some people with substantial unsecured debts and reliable disposable income, but it is not appropriate for everyone.

Does an IVA write off debt?

Qualifying unpaid balances are normally written off after successful completion.

Can I keep my house with an IVA?

Often, yes, although the arrangement's property and equity provisions must be reviewed.

Can I get a mortgage after an IVA?

Potentially, but lender requirements may be stricter and specialist advice may be necessary.

Does an IVA affect my partner?

It does not automatically place your partner in an IVA, but joint debts and shared financial arrangements may be affected.

Can creditors still contact me during an IVA?

Creditors included in the IVA are generally restricted from pursuing payment outside its terms.

How long does an IVA stay on your credit report?

Normally six years from the date it begins.

Can I borrow money during an IVA?

New borrowing is generally restricted and may require permission under the IVA terms.

Is an IVA better than bankruptcy?

Neither is universally better. The appropriate option depends on assets, income, debts and personal circumstances.

What Is an IVA UK - Key Considerations

An Individual Voluntary Arrangement is a formal debt solution that can help eligible individuals manage unsecured debts through an agreed repayment plan.

It may provide protection from creditor enforcement and result in qualifying debts being written off after successful completion.

However, IVAs involve fees, credit restrictions and long-term repayment obligations.

Homeowners should pay particular attention to how their property equity is treated, while tenants should ensure rent payments remain affordable.

Anyone considering an IVA should obtain free independent debt advice before signing an agreement.

This article provides general financial, insolvency and property information as of October 2026 and does not constitute regulated debt, financial or legal advice.

For professional residential property sales, valuations, lettings, property management and real estate advisory services across London and the wider UK, visit FraserBond.com.