If you’re considering an Individual Voluntary Arrangement (IVA) to deal with your debts, one of the first questions on your mind is probably: how much will I actually pay each month? It’s a fair question, and the answer depends on your personal circumstances.

This guide breaks down how IVA monthly payments work, what affects the amount you pay, and what to expect throughout the process.

How Are IVA Monthly Payments Calculated?

Your IVA monthly payment is based on what you can genuinely afford after covering essential living costs. An Insolvency Practitioner (IP) will review your income and expenditure to work out a realistic figure.

The calculation looks at:

• Your total monthly income (wages, benefits, any other earnings)
• Essential outgoings like rent or mortgage, council tax, utilities, food, transport, and insurance
• Any dependants you support
• Reasonable personal spending allowances

Whatever is left over after these essentials is your “disposable income,” and that’s what goes towards your IVA payment.

What’s the Average IVA Monthly Payment?

There’s no one-size-fits-all figure, but most IVA payments in the UK fall somewhere between £80 and £300 per month. Some people pay more, some pay less. It depends entirely on your financial situation.

Here’s a rough guide based on typical scenarios:

• Lower income with high essential costs: £80 to £120 per month
• Average income with moderate costs: £150 to £250 per month
• Higher income with lower outgoings: £250 to £400+ per month

The key point is that your payment should be affordable. An IVA that leaves you unable to cover basic living costs isn’t going to work for anyone.

How Long Do You Make Payments?

A standard IVA runs for five to six years. During this time, you make fixed monthly payments to your Insolvency Practitioner, who distributes the funds to your creditors.

If you’re a homeowner, your IVA might include a clause about releasing equity from your property in the final year. If that’s not possible (or you can’t remortgage), your IVA may be extended by up to 12 months instead.

Can Your IVA Payments Change?

Yes. Your circumstances can shift over the life of an IVA, and the arrangement can adapt to reflect that.

If your income drops

Losing your job or having your hours cut doesn’t automatically end your IVA. You can apply for a payment holiday (sometimes called a payment break), which temporarily pauses your contributions. Most IVAs allow up to three months of payment holidays over the full term.

If your income increases

If you get a pay rise or start earning more, your IVA payments may go up. Most IVAs include a “windfall clause” that requires you to report significant changes in income. Typically, 50% of any increase goes towards your IVA.

Annual reviews

Your Insolvency Practitioner will carry out an annual review of your income and expenditure. If things have changed substantially, your payment could be adjusted up or down.

What Happens If You Miss a Payment?

Missing the odd payment isn’t the end of the world, but it’s something to take seriously. If you know you’re going to struggle, contact your IP as early as possible. They can usually arrange a payment holiday or temporary reduction.

Consistently missing payments without communication is a different matter. If arrears build up, your IVA could fail, which means your creditors regain the right to chase you for the full amount owed.

Do You Pay Interest on an IVA?

No. Once your IVA is approved, interest and charges on the debts included in the arrangement are frozen. You only pay the agreed monthly amount, and at the end of your IVA term, any remaining debt is written off. This is one of the major advantages compared to continuing to pay minimum amounts on credit cards or loans where interest keeps piling up.

What Debts Are Covered by Your IVA Payments?

Your monthly IVA payment covers most unsecured debts, including:

• Credit cards and store cards
• Personal loans
• Overdrafts
• Catalogue debts
• Council tax arrears
• HMRC debts (income tax, National Insurance)
• Some benefit overpayments

Secured debts like your mortgage aren’t included, and neither are student loans, child maintenance, or court fines.

Will an IVA Affect Your Credit Rating?

Yes, an IVA will appear on your credit file for six years from the start date. During that time, getting credit will be harder. But if you’re already struggling with unmanageable debt, your credit score is likely suffering anyway. An IVA provides a structured path out, and once it’s completed and drops off your credit file, you can start rebuilding.

Is an IVA the Right Choice for You?

An IVA isn’t suitable for everyone. Generally, you’ll need:

• At least £6,000 in unsecured debt (though some providers accept lower amounts)
• Two or more creditors
• A regular income to make monthly payments
• Debts you’re genuinely struggling to repay

If your debts are smaller or you have no regular income, other options like a Debt Relief Order (DRO) or bankruptcy might be more appropriate.

Get Free Debt Advice

Before committing to any debt solution, it’s worth getting professional advice. Organisations like StepChange, National Debtline, and Citizens Advice offer free, impartial guidance.

If you’d like to find out whether an IVA could work for you and what your monthly payments might look like, get in touch for a free assessment. There’s no obligation, and it could be the first step towards clearing your debts for good.

Swift Debt Help provides general information about debt solutions. We are not financial advisers. Always seek professional advice before entering into any formal debt arrangement.

If you’re struggling with debt and considering an Individual Voluntary Arrangement (IVA), one of the first questions you’ll have is: which debts can be included in an IVA? Understanding which debts qualify, and which don’t, is essential before you commit to this legally binding agreement.

In this guide, we break down exactly which debts are included in an IVA in 2026, which debts are excluded, and what you need to know before applying.

What Is an IVA?

An IVA is a formal debt solution available in England, Wales, and Northern Ireland. It’s a legally binding agreement between you and your creditors, arranged through a licensed Insolvency Practitioner (IP). You make affordable monthly payments over a fixed period, typically five to six years, and at the end, any remaining qualifying debt is written off.

IVAs are regulated by the Insolvency Act 1986 and supervised by the Insolvency Service, making them one of the most structured and protected debt solutions available in the UK. If you’re unsure whether an IVA is right for your situation, our guide on whether you can get an IVA covers the eligibility criteria in detail.

Debts Included in an IVA

The good news is that most common unsecured debts can be included in an IVA. Here’s a comprehensive list of qualifying debts:

Credit Cards and Store Cards

All credit card and store card debts can be included in your IVA. This covers balances from major providers like Barclaycard, MBNA, Capital One, and high-street store cards. Once your IVA is approved, interest and charges on these accounts are frozen.

Personal Loans

Unsecured personal loans from banks, building societies, and online lenders can all be included. This applies whether the loan is from a high-street bank or a specialist lender. For more on how different loan types work, see our guide to types of loans explained.

Overdrafts

Both arranged and unarranged overdrafts qualify for inclusion in an IVA. Your bank will be notified as a creditor, and the overdraft balance will be treated as an unsecured debt.

Catalogue Debts and Buy Now Pay Later

Debts owed to catalogue companies such as Very, Littlewoods, and JD Williams can be included. Buy Now Pay Later (BNPL) debts from providers like Klarna and Clearpay can also be added to your IVA. This is increasingly relevant in 2026, as the FCA’s BNPL regulatory framework continues to develop, bringing these products under tighter oversight.

Payday Loans

High-interest payday loans and short-term lending debts are fully eligible for inclusion. Given the high interest rates these carry, including them in an IVA can provide significant relief. If you’re currently struggling with a payday loan, read our advice on what to do if you can’t afford your payday loan.

Council Tax Arrears

Outstanding council tax debt can be included in an IVA. However, only arrears up to the date of your IVA proposal qualify. You’ll still need to keep up with current council tax payments going forward.

HMRC Debts (Tax, VAT, National Insurance)

Debts owed to HMRC, including income tax, National Insurance contributions, and VAT, can be included in an IVA. HMRC is treated as any other unsecured creditor and will be bound by the arrangement if it’s approved.

Utility Bill Arrears

Unpaid gas, electricity, and water bills can be included. As with council tax, only arrears up to the IVA proposal date are covered. You must continue paying current utility bills.

Benefit Overpayments

Overpayments of benefits such as Universal Credit, Tax Credits, or Housing Benefit can be included in your IVA, though the DWP may still make deductions from ongoing benefits in some cases.

Debts to Friends and Family

Personal debts owed to individuals can technically be included in an IVA. However, they’ll be treated the same as all other creditors, receiving only a proportion of what’s owed. Many people choose to exclude these for personal reasons.

Debts That Cannot Be Included in an IVA

Certain types of debt are excluded from IVAs by law or by their nature:

• Mortgage and secured loan arrears: these are secured against your property and fall outside the IVA
• Student loans: Student Loans Company debt cannot be included
• Court fines and criminal penalties: magistrates’ court fines and criminal compensation orders are excluded
• Child maintenance (CMS/CSA): ongoing and arrears of child maintenance cannot be included
• Social fund loans: budgeting loans from the DWP are excluded
• Debts arising from fraud: if a debt was obtained through fraudulent activity, it cannot be written off

What About Hire Purchase and Car Finance?

Car finance and hire purchase agreements are secured against the vehicle, so they can’t be included in an IVA in the same way as unsecured debts. However, if you’ve already returned the vehicle and there’s a shortfall balance, that shortfall can be included as an unsecured debt.

If you’re currently making car finance payments, your Insolvency Practitioner will factor these into your budget as an essential expense.

How Much Debt Do You Need for an IVA?

While there’s no strict legal minimum, most Insolvency Practitioners require at least £6,000 in qualifying unsecured debt and a minimum of two creditors before they’ll propose an IVA. The average IVA in the UK covers debts of around £25,000 to £30,000 according to Insolvency Service statistics, but arrangements for both smaller and much larger amounts are common.

What Happens to Interest and Charges?

Once your IVA is approved by creditors, all interest and charges on included debts are frozen. This is one of the biggest advantages: your debt stops growing, and every payment you make goes directly towards reducing what you owe. For a fuller picture of the benefits, have a look at our article on 10 reasons an IVA is worth it.

Can Creditors Refuse to Be Included?

You don’t choose which creditors to include. All unsecured creditors must be listed in your IVA proposal. However, creditors can vote on whether to accept the arrangement. For the IVA to be approved, creditors holding at least 75% of your total debt (by value) must vote in favour.

Once approved, the IVA is binding on all listed creditors, even those who voted against it.

How Much Debt Can Be Written Off Through an IVA?

The amount written off depends on your circumstances, but on average, people in IVAs have 50 to 70% of their qualifying debt written off. Some arrangements result in even higher write-offs. Your Insolvency Practitioner will calculate what you can realistically afford, and the remaining balance is cleared when your IVA completes.

If you want to understand how long the process takes from start to finish, our guide on how long an IVA lasts covers the typical timeline.

Free Debt Advice and Support

Before committing to any debt solution, it’s worth getting free, independent advice. The following organisations offer confidential support at no cost:

• StepChange Debt Charity: free online and telephone debt advice
• MoneyHelper: government-backed guidance on debt options
• Citizens Advice: free local and online debt support

Next Steps: Is an IVA Right for You?

If most of your debts fall into the qualifying categories above and you can afford regular monthly payments, an IVA could be the right solution. The best way to find out is to speak to a qualified debt adviser who can assess your full financial situation.

Our team at Swift Debt Help can review your debts, check your eligibility, and guide you through the process with no obligation. Read our step-by-step guide to applying for an IVA, or get in touch directly.

This article is for general information purposes only and does not constitute financial advice. If you are struggling with debt, we recommend seeking advice from a qualified professional or one of the free debt advice services listed above. Swift Debt Help is not authorised to provide regulated financial advice.

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

If you’re considering an Individual Voluntary Arrangement (IVA) to deal with your debts, one of the first questions you’ll likely ask is: how long will it take? Knowing the timeline helps you plan ahead and understand what to expect during the process.

This guide covers everything you need to know about IVA duration in the UK, including what affects the length, what happens during the arrangement, and what life looks like once it’s finished.

The Standard IVA Length

A typical IVA in the UK lasts five years (60 months). During this period, you make regular monthly payments to an insolvency practitioner (IP), who distributes the money among your creditors. At the end of the five years, any remaining qualifying debt is written off.

Some IVAs can last six years if you’re a homeowner and need to release equity from your property. This extension happens in the final year if a remortgage is required as part of the arrangement.

Can an IVA Be Shorter Than Five Years?

Yes, in certain circumstances. If you receive a lump sum, perhaps from an inheritance, redundancy payment, or sale of an asset, you may be able to settle your IVA early. This is known as a “full and final settlement” and involves offering your creditors a one-off payment in exchange for ending the arrangement ahead of schedule.

Your insolvency practitioner would negotiate this on your behalf. Creditors aren’t obligated to accept, but many do if the offer represents a reasonable return compared to waiting out the full term.

What Can Make an IVA Last Longer?

Several factors can extend your IVA beyond the standard five years:

• Missed payments: If you miss monthly payments, those months may be added to the end of your IVA. Three missed payments in a row could put your entire arrangement at risk of failure.
• Payment breaks: While IVAs do allow for payment holidays in some cases (redundancy, illness), these months are typically added to the total duration.
• Equity release: Homeowners are usually required to attempt a remortgage in year five. If successful, the released equity goes towards the IVA. If not, the arrangement may be extended by 12 months with additional payments instead.
• Variation to terms: If your circumstances change significantly, your IP might propose a variation that adjusts the payment amount or extends the term.

What Happens During the Five Years?

Living with an IVA means committing to a structured repayment plan. Here’s what to expect:

• Monthly payments: You’ll pay an agreed amount each month based on your disposable income. This is reviewed annually.
• Annual reviews: Your IP will assess your income and expenses each year. If your income has gone up, your payments may increase. If it’s dropped, they could decrease.
• Credit restrictions: You won’t be able to take on new credit of more than £500 without your IP’s permission. Your credit file will show the IVA for six years from the start date.
• Windfall clause: If you receive any unexpected money (inheritance, lottery win, bonus), you’re normally required to declare it. A portion or all of it may need to go towards your IVA.
• Creditor protection: Once your IVA is approved, your creditors can’t chase you for the debts included in the arrangement. No more letters, calls, or threats of legal action.

What Happens When Your IVA Ends?

Once you’ve completed all your payments and met the terms of your arrangement, your IP will issue a completion certificate. At this point:

• Any remaining debt included in the IVA is legally written off
• You’re free from the restrictions of the arrangement
• Your IVA will stay on your credit file for six years from the start date (so it may already have dropped off or will do shortly after completion)
• You can start rebuilding your credit score

Most people find that within 12 to 18 months of completing their IVA, their credit score has improved enough to access mainstream financial products again.

IVA vs Other Debt Solutions: Duration Comparison

To put the IVA timeline in context, here’s how it compares to other options:

• Debt Management Plan (DMP): No fixed end date. Can last anywhere from 5 to 15+ years depending on the debt amount and what you can afford to pay.
• Debt Relief Order (DRO): Lasts 12 months, after which qualifying debts are written off. Only available for debts under £30,000 with limited assets.
• Bankruptcy: Typically discharged after 12 months, though restrictions can last longer. Stays on your credit file for six years.

An IVA offers a middle ground: a fixed endpoint with debt write-off, without the more severe consequences of bankruptcy.

Is Five Years a Long Time?

It can feel like it at first. But consider the alternative: many people struggling with unmanageable debt spend far longer than five years trying to keep up with minimum payments that barely touch the balance. An IVA gives you a clear finish line and a genuine fresh start.

The structure can actually be reassuring. You know exactly what you’re paying, for how long, and what happens at the end. There are no surprises, and your creditors are legally bound by the arrangement.

Getting Started

If you’re wondering whether an IVA is right for your situation, the first step is getting professional advice. A qualified insolvency practitioner can assess your debts, income, and circumstances to recommend the best solution for you.

At Swift Debt Help, we connect you with experienced advisors who can talk you through your options at no cost. Whether an IVA, DMP, DRO, or another solution is most suitable, you’ll get honest, straightforward guidance.

Find out if you qualify for an IVA