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How Much Debt Do You Need for an IVA? UK Eligibility Guide 2026

Written by Jess Gambo on . Posted in IVA.

What Is the Minimum Debt for an IVA?

If you’re struggling with debts and considering an Individual Voluntary Arrangement (IVA), one of the first questions you’ll have is: how much debt do you actually need? The short answer is that most IVA providers require a minimum of £6,000 in unsecured debt, though some may accept slightly less depending on your circumstances.

An IVA is a legally binding agreement between you and your creditors. It allows you to repay a portion of what you owe over a fixed period, typically five to six years, with any remaining debt written off at the end. But there are specific criteria you need to meet before you can apply.

IVA Debt Thresholds: What the Numbers Look Like

While there’s no single figure written into law, the debt industry generally works to these benchmarks:

  • £6,000 minimum in total unsecured debt across all creditors
  • At least two separate creditors (you can’t set up an IVA with just one)
  • Enough disposable income to make meaningful monthly contributions (usually £80 or more)

Some insolvency practitioners will consider lower debt levels if you have a lump sum to offer, but this is less common.

What Counts as Qualifying Debt?

Not all debts can be included in an IVA. The arrangement covers unsecured debts only, which includes:

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

Secured debts like your mortgage or a car finance agreement on HP cannot be included. Student loans are also excluded from IVAs.

Can You Get an IVA with Less Than £6,000 of Debt?

Technically, yes, but it becomes harder. If your total debt is under £6,000, creditors may question whether an IVA is proportionate. The setup costs for an insolvency practitioner make very low debt levels less practical for everyone involved.

If your debts are below this threshold, you might be better suited to a Debt Management Plan (DMP), which has no minimum debt requirement and offers more flexibility, though it doesn’t carry the same legal protections as an IVA.

Is There a Maximum Debt Limit for an IVA?

No. There’s no upper limit on how much debt you can include in an IVA. People with debts ranging from £6,000 to well over £100,000 have successfully used IVAs to manage their finances. The key factor isn’t how much you owe, but whether you can demonstrate a realistic repayment plan.

Other Eligibility Requirements

Meeting the debt threshold alone won’t guarantee approval. You’ll also need to satisfy these conditions:

  • UK resident or have a strong connection to England, Wales, or Northern Ireland (Scotland has its own equivalent called a Protected Trust Deed)
  • Regular income sufficient to make monthly payments after essential living costs
  • Creditor approval, meaning 75% of voting creditors (by debt value) must agree to the arrangement
  • You must be able to show that the IVA offers creditors a better return than bankruptcy

How Monthly Payments Are Calculated

Your IVA payment is based on what you can genuinely afford after covering essential expenses. An insolvency practitioner will review your income and outgoings, including:

  • Rent or mortgage payments
  • Utility bills and council tax
  • Food and household costs
  • Transport and commuting
  • Childcare and dependant costs
  • Insurance and essential subscriptions

Whatever remains after these costs is your disposable income, and a portion of this goes towards your IVA payments. Most arrangements require payments between £80 and £300 per month, though this varies significantly based on individual circumstances.

What If Your Circumstances Change?

Life doesn’t stand still during a five-year arrangement. If your income drops or your costs increase, you can request a payment variation or even a payment holiday from your insolvency practitioner. These aren’t guaranteed, but they’re regularly granted when there’s a genuine change in circumstances.

Conversely, if your income increases significantly, your payments may go up too. Your insolvency practitioner will conduct annual reviews to check whether your contributions remain fair.

How Much Debt Gets Written Off?

This is the part most people want to know about. On average, IVA participants have between 50% and 70% of their total debt written off at the end of the arrangement. The exact figure depends on how much you’ve been able to repay over the term.

For example, if you owe £20,000 and pay back £8,000 over five years, the remaining £12,000 is legally written off. Your creditors cannot chase you for it once the IVA completes successfully.

Alternatives If You Don’t Qualify

If an IVA isn’t the right fit, there are other options worth considering:

  • Debt Management Plan (DMP): informal, flexible, no minimum debt, but no legal protection
  • Debt Relief Order (DRO): for debts under £50,000 with minimal assets and low income
  • Bankruptcy: for severe debt situations where other solutions aren’t viable
  • Breathing Space: a 60-day legal pause on creditor action while you seek advice

Getting Free Advice

Before committing to any debt solution, speak to a qualified adviser. Free services like StepChange, National Debtline, and Citizens Advice can help you understand your options without pressure.

If you’d like to discuss whether an IVA is right for your situation, get in touch with our team for a free, no-obligation chat about your options.