Can I Get an IVA With Bad Credit? UK Guide for 2026

If you’re struggling with debt and your credit score has taken a hit, you might be wondering whether an Individual Voluntary Arrangement is still an option. The good news? Having bad credit doesn’t stop you from getting an IVA. In fact, most people who apply for one already have a poor credit rating.

Here’s everything you need to know about applying for an IVA with bad credit in 2026.

Does Your Credit Score Affect IVA Eligibility?

Your credit score is not part of the IVA eligibility criteria. Unlike a loan or credit card application, an IVA doesn’t require a credit check in the traditional sense. Your Insolvency Practitioner (IP) won’t run a credit score before accepting your case.

What matters instead is:

• You owe at least £6,000 in unsecured debt (though some IPs accept lower amounts)
• You owe money to two or more creditors
• You can afford regular monthly payments towards your debt
• You have a stable source of income, whether employed or self-employed

If you meet those criteria, bad credit won’t stand in your way.

Why Bad Credit Is Common Among IVA Applicants

Most people applying for an IVA have already missed payments, defaulted on accounts, or received County Court Judgments (CCJs). That’s completely normal. The whole point of an IVA is to help people who are already in financial difficulty.

Common signs that lead to both bad credit and IVA applications include:

• Missed credit card or loan payments
• Defaults registered on your credit file
• CCJs issued against you
• Using overdrafts as everyday spending money
• Borrowing from one lender to pay another

If any of those sound familiar, you’re exactly the type of person an IVA is designed to help.

How an IVA Works When You Have Bad Credit

The process is the same regardless of your credit history:

1. Free assessment: You speak with a debt adviser who reviews your income, expenses, and total debts
2. Proposal: Your IP prepares a formal proposal offering your creditors reduced monthly payments over a set period (usually five or six years)
3. Creditor vote: Creditors holding 75% or more of your debt (by value) must agree to the arrangement
4. Approval: Once approved, the IVA becomes legally binding on all included creditors
5. Monthly payments: You make one affordable payment each month, and at the end of the term, remaining debt is written off

Your credit history plays no role in whether creditors accept or reject the proposal. They’re looking at whether your offer is better than the alternatives, like bankruptcy, where they might get nothing at all.

Will an IVA Make Your Credit Score Worse?

An IVA is recorded on the Individual Insolvency Register and stays on your credit file for six years from the approval date. During the IVA, you won’t be able to take on new credit of £500 or more without your IP’s permission.

However, if your credit is already damaged by defaults and missed payments, an IVA gives you a structured path to becoming debt-free. Once the IVA completes and drops off your file, you can start rebuilding your credit from a clean slate.

Many people find their credit score actually improves within 12 to 18 months of completing an IVA, especially if they take steps like:

• Registering on the electoral roll
• Using a credit-builder card responsibly
• Keeping up with all household bills on time
• Avoiding applications for credit in quick succession

What About Secured Debts?

An IVA only covers unsecured debts, including credit cards, personal loans, store cards, overdrafts, catalogue debts, and some forms of council tax arrears. Secured debts like your mortgage or a car on hire purchase aren’t included.

That said, your mortgage and essential living costs are factored into your budget before your IVA payment is calculated. You won’t be asked to pay more than you can genuinely afford.

Can Creditors Reject Your IVA Because of Bad Credit?

Creditors can reject an IVA proposal, but not because of your credit score. They’d typically reject if:

• The offered repayment amount is too low
• They believe you can afford to pay more
• There’s evidence of fraud or reckless borrowing
• They think bankruptcy would recover more money

In practice, most IVA proposals are accepted. The approval rate across the UK has consistently stayed above 90% in recent years. Creditors know that an IVA typically returns more than bankruptcy, so they have a financial incentive to agree.

Alternatives if You Don’t Qualify for an IVA

If your debts are below the typical threshold or your circumstances don’t suit an IVA, other options are available:

• Debt Relief Order (DRO): For debts under £30,000 with minimal assets and low income
• Debt Management Plan (DMP): An informal arrangement to repay debts at a reduced rate
• Bankruptcy: Wipes most debts clean but has more serious consequences for assets and employment
• Breathing Space: A 60-day pause on creditor action while you get advice

A qualified debt adviser can help you work out which solution fits your situation best.

How to Get Started

If you have bad credit and you’re considering an IVA, the first step is a free, no-obligation debt assessment. A specialist will review your debts, income, and expenses to confirm whether an IVA is the right route for you.

You don’t need to fix your credit score first. You don’t need to be a homeowner. You just need to meet the basic eligibility requirements and be committed to making regular payments.

Ready to find out if you qualify? Use our free eligibility checker to get started today.

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Key Takeaways

• Bad credit does not prevent you from getting an IVA
• IVA eligibility is based on debt level, number of creditors, and ability to pay, not your credit score
• Most IVA applicants already have poor credit when they apply
• An IVA stays on your credit file for six years but gives you a clear path to becoming debt-free
• Creditor approval rates for IVAs are consistently above 90%
• After completion, you can rebuild your credit from scratch