Individual Voluntary Arrangement (IVA)

Is an IVA your golden ticket?

It’s likely you’ve clicked onto this section because you’re considering going into an Individual Voluntary Arrangement or it’s shortened name, an ‘IVA’. Something might be niggling away at the back of your mind. The insolvency practitioner seemed just a bit too pushy. They made it sound so easy “5 years and you’re done, no more debt”. Always trust the feeling in your gut when you think something doesn’t seem quite right and makes you look deeper.

Hold on a minute!

Just one quick point before you carry on! It’s important to know that this page is a brief overview of Individual Voluntary Arrangements (IVAs). To get the full details and understanding of this subject click here or at the bottom of page in the purple box.

Let's begin

Whilst an IVA may seem like a fantastic idea, there are some important red flags that you need to be aware of before you commit.

So let’s start with “What is an IVA?”

What is an Individual Voluntary Arrangement (IVA)?

An IVA is a legally binding agreement that you can make with your creditors to pay off all, or part of your debts. It’s also a form of insolvency. It was actually designed to prevent people struggling to pay their debts from the risk of losing their assets.

Nowadays, people without any assets are being granted an IVA. If you do not have any assets to protect then you really shouldn’t be considering an IVA. If you do have assets and your debts are all unsecured, insolvency options like an IVA should be a last resort. IVA’s impact your credit file greatly, come with restrictions that may affect you greatly and can also lead you to bankruptcy if you are unable to maintain your payments.

So, what's the alternative to an IVA?

Before you even look at your options your starting point should be to check if your debt is statute barred. If your debt is over six years old and you haven’t paid towards, communicated about or the debt has not gone to court it may be statute barred. You can read more details about this in the article in the purple box below. In short, it may mean that your debt could be handled with one simple letter (we have that covered for you too).

If your debt isn’t statute barred and you fully understand what an IVA is (remember we have a detailed article about this in the purple box below) along with the potential impacts, it’s pros and cons based on your own situation, it’s now time to look at alternatives that may not be as drastic.

Unsecured Debt

If your debts are unsecured, under the Financial Conduct Authority (FCA) Handbook section 7.3.5, you are able to make token payments towards your debts. We have more details about how to handle financial difficulties with unsecured debts here, in this area we cover each option at length. Putting it simply you can handle these types of debts without going down the insolvency route.

Secured Debt

If your debt is a secured debt, it's unlikely it will be accepted into an IVA by the creditor, if you are told by an insolvency practitioner that secured debts will definitely be accepted that’s a major red flag. Permission has to be given by the creditor for this to happen. Secured debts are debts like a mortgage as an example. If this is something you are struggling with, you can tackle it by heading over to our article '7 steps to handle your mortgage arrears' which you will find in the purple box below. You’re not alone, we got you.


It is so important that you always gather the full facts before you sign on the dotted line. What you hear may sound great at first but the vast majority of the time there will be consequences to your actions. You must ask yourself “Are you ok with the consequences?” and “Is there another way?”.

We’re here to give you as many options, unbiased information along with consequences as we can. That way you can make your own decision without feeling pressured. We want you to be in control at all times. Remember, any decision you make is the right one because it’s you who made it and you know your situation best.

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