Can I get an IVA? If you owe more than you can realistically repay and you are looking for a structured way out, an Individual Voluntary Arrangement could be the answer. An IVA is one of the most popular formal debt solutions in England and Wales, and in 2026 it remains a realistic option for thousands of people each year.
What Is an IVA and How Does It Work?
An IVA is a legally binding agreement between you and the people you owe money to. It is set up and supervised by a licensed Insolvency Practitioner (IP). You agree to make regular monthly payments, typically over five or six years, and at the end of the arrangement any remaining qualifying debt is written off.
Can I Get an IVA? Eligibility Criteria in 2026
There is no single pass-or-fail test, but in practice most IVA providers look for the following: at least £6,000 in unsecured debt, two or more creditors, regular income, and ability to pay around £80 to £100 per month after essential living costs.
The IVA Process Step by Step
The process involves a free assessment, a formal proposal, a creditors’ meeting requiring 75% approval, monthly payments over five to six years, and completion with remaining debt written off.
Benefits and Drawbacks of an IVA
Benefits include affordable payments, frozen interest, creditor protection, and debt write-off. Drawbacks include credit file impact for six years, strict budgeting, and the risk of bankruptcy if the IVA fails.
What Happens to Your Credit Score During an IVA?
An IVA will show on your credit file for six years from the start date. After that, the record drops off and your score starts to rebuild.
Alternatives to an IVA
Other options include Debt Relief Orders, Debt Management Plans, and bankruptcy. Free help is available from MoneyHelper, StepChange, and Citizens Advice.
Ready to Find Out if You Qualify for an IVA?
Get in touch today for a free, no-obligation assessment.
If you are struggling with debt and looking for a way to get back on track, you have probably come across two common solutions: an Individual Voluntary Arrangement (IVA) and a Debt Relief Order (DRO). Both are formal, legally binding debt solutions available in England, Wales and Northern Ireland, but they work in very different ways. Choosing the right one depends on your circumstances, the amount you owe and what you can afford to pay each month.
This guide breaks down how each option works in 2026, who qualifies and the advantages and drawbacks of both, so you can make an informed decision about which route might suit your situation.
What Is an IVA?
An IVA is a formal agreement between you and your creditors, managed by a licensed Insolvency Practitioner (IP). Your IP assesses your income and essential outgoings, then proposes a monthly payment you can realistically afford. If your creditors holding 75% or more of the total debt value approve the arrangement, it becomes legally binding on all of them.
A typical IVA lasts five to six years. During that time, you make a single monthly payment that gets distributed among your creditors. At the end of the arrangement, any remaining debt included in the IVA is written off. You can include most unsecured debts: credit cards, personal loans, catalogue debts, overdrafts and some tax debts.
A DRO is designed for people who owe relatively little, have minimal assets and no realistic way of repaying what they owe. When a DRO is granted, your debts and any interest are frozen for 12 months. If your situation has not significantly improved during that period, the debts are written off entirely.
As of 2026, the DRO debt threshold is £50,000, and the application fee has been scrapped completely, making it free to apply. You apply through an approved intermediary, usually a debt adviser at a charity like Citizens Advice or StepChange. The Insolvency Service then decides whether to grant the order.
Owe at least £6,000 in unsecured debt (though some IPs set higher minimums)
Have two or more creditors
Be able to afford regular monthly payments after essential living costs
Live or have a connection to England, Wales or Northern Ireland
There is no upper debt limit for an IVA. Homeowners can apply, and business owners can continue trading while in an IVA, which makes it a flexible option for a wider range of people.
DRO Eligibility: Who Can Apply?
DRO criteria are stricter. To qualify in 2026, you must:
Owe no more than £50,000 in qualifying debt
Have assets worth no more than £2,000 (your car can be worth up to £4,000)
Have a surplus income of no more than £75 per month after essential costs
Not be a homeowner
Not have had a DRO in the last six years
Live in England, Wales or Northern Ireland
The application fee was removed in 2024, so there is now no cost to apply for a DRO. This makes it one of the most accessible debt solutions for people on very low incomes.
Advantages of an IVA
An IVA can be a strong option if you have a regular income and want to avoid bankruptcy. Here are the main benefits:
Any debt remaining at the end of the arrangement is written off
Your monthly payment is based on what you can genuinely afford
Creditors cannot chase you for payment or take legal action while the IVA is active
Interest and charges on included debts are frozen
Homeowners can protect their property (though equity release may be required in the final year)
Business owners can keep trading
Drawbacks of an IVA
An IVA is not without its downsides. You should be aware of these before committing:
It lasts five to six years, so it is a long commitment
If the IVA fails (for example, you miss payments), you could face bankruptcy
Your IVA is recorded on the Insolvency Register, which is public
It stays on your credit file for six years from the start date
Certain jobs, particularly in finance or law, may be affected
You must follow a strict budget throughout the arrangement
Homeowners may need to release equity from their property in year five
Advantages of a DRO
For people with very little income and few assets, a DRO offers a quick and affordable way to deal with debt:
It is completely free to apply
Debts are frozen for 12 months and then written off
Creditors cannot pursue you or take legal action during the DRO
There are no monthly payments to make
It is one of the fastest formal debt solutions available
Drawbacks of a DRO
A DRO comes with restrictions too:
You must meet strict eligibility criteria, including the £50,000 debt cap and £75 surplus income limit
Homeowners cannot apply
It appears on the Insolvency Register for 15 months
It stays on your credit file for six years
If your financial situation improves during the 12 months, the DRO can be revoked
You cannot apply for credit of £500 or more without telling the lender about the DRO
IVA vs DRO: a Quick Comparison
Here is a straightforward comparison to help you see the differences at a glance:
Monthly payments: IVA requires regular payments; DRO has no payments
Duration: IVA lasts five to six years; DRO lasts 12 months
Debt limit: IVA has no upper limit; DRO caps at £50,000
Cost to apply: IVA fees are included in payments; DRO is free
Homeowners: IVA allows homeowners; DRO does not
Credit impact: both stay on your credit file for six years
Which One Is Right for You?
The right choice depends entirely on your personal circumstances. If you have a steady income and can afford to make monthly payments, an IVA lets you pay back what you can afford and have the rest written off over time. It is particularly suitable if you own your home or run a business.
If your income is very low, you have minimal assets and your debts are under £50,000, a DRO could clear your debts in just 12 months with no cost and no monthly payments. It is designed specifically for people who genuinely cannot afford to repay what they owe.
Neither option should be entered into lightly. Both affect your credit rating for six years and appear on public registers. It is always worth speaking to a qualified debt adviser before making a decision. You can get free, impartial advice from MoneyHelper or StepChange.
Get Free Debt Advice Today
If you are unsure whether an IVA or DRO is the right fit, we can help point you in the right direction. Use our free eligibility checker below, or request a call back from one of our friendly advisers. There is no obligation and no judgement, just straightforward guidance to help you take the next step.
Swift Debt Help does not provide financial advice. The information on this page is for general guidance only. Debt solutions may not be suitable for everyone, and fees may apply depending on the solution. Your credit rating may be affected. Always seek advice from a qualified professional before entering into any debt solution.
If you are struggling with unmanageable debt, an Individual Voluntary Arrangement (IVA) could give you the legal protection you need to get your finances back on track. An IVA is a formal, legally binding agreement between you and your creditors, set up through a licensed Insolvency Practitioner (IP). It allows you to repay a portion of what you owe over a fixed period, typically five or six years, based on what you can genuinely afford.
But beyond the repayment structure, an IVA offers several layers of protection that many people are not aware of. This guide breaks down exactly how an IVA shields you from further financial pressure in 2026.
Your debts are frozen: no more interest or charges
One of the biggest advantages of an IVA is that, once your creditors approve the arrangement, they cannot add interest, late payment fees or any other charges to your included debts. This means the total amount you owe will not increase for the duration of the IVA.
Without this protection, debts can spiral quickly. Credit card interest alone can add hundreds of pounds each year. With an IVA in place, you know exactly what you owe and exactly what you will pay each month, giving you a clear path forward.
A common worry for people considering debt solutions is whether they will lose their home. With an IVA, the answer is generally no. Unlike bankruptcy, an IVA does not require you to sell your property unless you voluntarily offer it as part of your proposal.
Once the IVA is approved, your unsecured creditors are legally prevented from taking further enforcement action. That means they cannot:
Apply for a County Court Judgement (CCJ) against you
Instruct bailiffs to seize your belongings
Force the sale of your home
Make deductions directly from your wages (known as an attachment of earnings)
Your car, household items and personal possessions are also typically safe, provided they are not luxury or high-value assets that fall outside reasonable living needs.
Legal protection from creditor action
Perhaps the most powerful aspect of an IVA is the legal protection it provides. Once 75% of your creditors (by debt value) vote in favour of the arrangement, it becomes binding on all of them, even those who voted against it.
This means creditors must stop all collection activity. No more threatening letters, no phone calls demanding payment, and no legal proceedings. If a creditor does attempt to take action against you while your IVA is active, your Insolvency Practitioner can step in on your behalf.
For more information on the legal framework, the GOV.UK guide to IVAs explains how the process works under the Insolvency Act 1986.
Protection from bailiffs
Bailiff visits are one of the most stressful experiences for anyone dealing with debt. Once your IVA is in place, creditors included in the arrangement cannot instruct bailiffs to visit your home or seize your property.
There is one thing to be aware of: it typically takes around four to six weeks for an IVA to be formally approved. During this interim period, you could still be contacted by debt collectors. If this happens, let them know you are in the process of setting up an IVA and provide your Insolvency Practitioner’s details. Most creditors will pause collection activity once they are aware an IVA proposal is underway.
It is worth noting that an IVA only covers unsecured debts. Secured debts such as your mortgage, and certain priority debts like council tax arrears or TV licence fines, are not included. You can find free guidance on dealing with all types of debt through StepChange, one of the UK’s leading debt charities.
Flexibility if your circumstances change
Life does not stand still for five years, and the IVA process accounts for that. If your income drops due to redundancy, illness or a change in family circumstances, your Insolvency Practitioner can adjust your payments accordingly.
Minor changes can usually be handled through a simple payment reduction, sometimes called a payment break. For more significant changes, your IP may arrange a Variation Meeting where a revised proposal is put to your creditors for approval.
This built-in flexibility is one of the reasons many people choose an IVA over other debt solutions. You will not be locked into payments you cannot afford, and the arrangement adapts to your real life situation rather than forcing you into a rigid schedule.
You only pay what you can afford
Before your IVA begins, your Insolvency Practitioner carries out a detailed review of your income and essential outgoings. This includes rent or mortgage payments, utility bills, food, travel costs and other necessary expenses. Only the money left over after these essentials is allocated towards your IVA payments.
Your IVA is reviewed annually, so if your income increases or your costs go up, your payments can be adjusted. The goal is always to ensure you can meet your obligations without falling into further hardship.
Once you have completed all your IVA payments, any remaining unsecured debt included in the arrangement is written off. For many people, this can mean thousands of pounds of debt cleared entirely.
How does an IVA compare to other debt solutions?
An IVA is not the only option available. Depending on your situation, you might also consider:
A Debt Relief Order (DRO), suitable if you owe less than £50,000 and have limited assets. As of 2026, there is no fee to apply for a DRO.
Bankruptcy, which may be appropriate for larger debts but can involve selling assets. The current bankruptcy petition fee is £680.
A Debt Management Plan (DMP), an informal arrangement with lower legal protection than an IVA.
Each option has different eligibility requirements and consequences. You can explore the differences further with MoneyHelper’s debt solutions tool, which provides free, impartial guidance.
If you are weighing up IVA against bankruptcy specifically, our detailed comparison of IVA vs bankruptcy breaks down the key differences.
Will an IVA affect your credit rating?
Yes, an IVA will be recorded on your credit file for the duration of the arrangement, plus an additional 12 months after completion. It will also appear on the Individual Insolvency Register, which is a public record.
This can make it harder to obtain credit during and immediately after your IVA. However, once the IVA is completed and your credit file is updated, you can start rebuilding your score. Many people find they are able to access credit again within a year or two of completing their arrangement. Our guide on how to improve your credit score after an IVA has practical steps to help you recover.
Is an IVA right for you?
An IVA works best for people who have a regular income and owe a significant amount of unsecured debt, typically £6,000 or more to two or more creditors. It offers strong legal protection, freezes your debts, and provides a structured, affordable path to becoming debt free.
If you are ready to explore whether an IVA is the right fit for your situation, you can apply for an IVA online or get in touch with us for a free, no-obligation assessment.
Important: The information on this page is for general guidance only and does not constitute financial advice. If you are unsure about the best course of action for your situation, we recommend speaking to a qualified debt adviser or contacting a free service such as StepChange or MoneyHelper.
Ready to Find Out if You Qualify for Help?
Use our Solution Finder for a free, no-obligation assessment. Our team can help you understand your options and take the first step towards a debt-free future.
If you have been through an Individual Voluntary Arrangement (IVA), the idea of applying for a mortgage might feel daunting. The good news is that having an IVA on your record does not automatically disqualify you from getting a mortgage. Plenty of people go on to become homeowners after completing their IVA, and with the right preparation, you can put yourself in a strong position to do the same.
This guide covers what you need to know about getting a mortgage after an IVA in 2026, from rebuilding your credit score to choosing the right broker.
How Does an IVA Affect Your Mortgage Application?
An IVA is a formal debt solution that stays on your credit report for six years from the date it was approved. During that time, most high street lenders will turn down your mortgage application. This is because an IVA signals to lenders that you previously struggled to manage your debts.
However, once the IVA drops off your credit file, your options open up significantly. Even before it disappears, some specialist lenders may consider your application, particularly if you can demonstrate that your finances have improved.
It is worth noting that an IVA is recorded on the Individual Insolvency Register, which is a public record. Lenders may check this as part of their due diligence, so transparency is always the best approach.
When Can You Apply for a Mortgage After an IVA?
Technically, you can apply at any point after your IVA has been completed. Your Insolvency Practitioner will issue a completion certificate confirming that all payments have been made and you are no longer bound by the arrangement. Keep this certificate safe, as lenders or brokers may want to see it.
In practice, your chances of approval improve significantly once the IVA has been removed from your credit report (six years after it started). If you completed your IVA early or it lasted the standard five years, there may only be a short gap before it falls off your file entirely.
Some specialist lenders will consider applications while the IVA is still showing, but you should expect higher interest rates and stricter terms.
Steps to Improve Your Chances
Get Your IVA Completion Certificate
Your completion certificate proves to lenders that you fulfilled all your obligations under the IVA. Without it, lenders have no way to verify that the arrangement ended successfully. Contact your Insolvency Practitioner if you have not received yours.
Rebuild Your Credit Score
Your credit score will have taken a hit during and immediately after your IVA. Rebuilding it takes time and patience, but there are practical steps you can take:
Register on the electoral roll at your current address
Check your credit report for errors and dispute any inaccuracies. You can do this through Experian, Equifax, or TransUnion
Consider a credit builder card, use it for small purchases and pay the balance in full each month
Report your rent payments through a free service like CreditLadder to build a track record of regular payments
Use Experian Boost to add your council tax and subscription payments to your credit file
Avoid applying for multiple credit products in a short period, as each hard search leaves a mark on your report
A larger deposit reduces the risk for the lender and gives you access to better mortgage rates. While you are in your IVA, you are unlikely to have spare cash for saving. Once it ends, though, the money that was going towards your monthly IVA payment can be redirected into a savings pot.
Most lenders will want at least a 15% to 20% deposit if you have a history of insolvency. A 25% deposit or higher opens up even more options and better rates. With average UK house prices sitting around £290,000 in early 2026, that means you would need to save between £43,500 and £72,500 for a deposit, depending on where you are buying.
Keep Your Finances Stable
Lenders look at your overall financial behaviour, not just your credit score. Avoid overdrafts, keep up with all your regular bills, and maintain steady employment if possible. Having a stable income history of at least 12 months makes a noticeable difference to how lenders assess your application.
Using a Specialist Mortgage Broker
A specialist mortgage broker who has experience with post-insolvency applications is one of the most valuable resources available to you. They know which lenders are more likely to consider someone with an IVA history and can match you with appropriate products rather than wasting time on applications that will be declined.
A good broker will:
Review your credit report and financial situation before recommending lenders
Request a “soft search” initially to avoid unnecessary marks on your credit file
Explain the rates and terms you can realistically expect
Handle the application process and communicate with the lender on your behalf
Services like MoneyHelper can help you find a qualified mortgage adviser.
What About Getting a Mortgage During an IVA?
While your IVA is still active, getting a mortgage is extremely difficult. Your IVA terms will usually prevent you from taking on new credit of more than £500 without your Insolvency Practitioner’s written permission. Even with permission, very few lenders will approve a mortgage for someone currently in an IVA.
If you are a homeowner when you enter an IVA, you may be required to remortgage in the final year of the arrangement to release equity for your creditors. Our article on getting a mortgage with an IVA covers this in more detail.
Could Other Debt Solutions Affect Your Mortgage Prospects?
If you are still considering your options and have not yet entered an IVA, it is worth understanding how different debt solutions compare. A Debt Relief Order (DRO), for example, now covers debts up to £50,000 following the threshold increase in June 2024, and the application fee was abolished in April 2024, making it free to apply. A DRO also stays on your credit report for six years.
Bankruptcy is another route, currently costing £680 to apply, and it too remains on your credit file for six years. Both options can affect mortgage applications in similar ways to an IVA.
The UK mortgage market in 2026 is competitive, and lenders have become more open to applicants with complex credit histories than they were a decade ago. Specialist products exist specifically for people who have been through insolvency, and with the right preparation, your application does not have to be an uphill battle.
That said, you should expect:
Higher interest rates than someone with a clean credit history
A requirement for a larger deposit (typically 15% or more)
More paperwork and documentation, including your IVA completion certificate
Potentially longer processing times as lenders carry out extra checks
As your credit improves over time, you may be able to remortgage onto a better deal after a few years.
Free Debt Advice and Support
If you are still dealing with debt or unsure which solution is right for you, free and impartial advice is available from:
Getting a mortgage after an IVA takes planning, patience, and the right guidance. If you are currently struggling with debt and want to understand your options, Swift Debt Help can point you in the right direction. We provide general information about debt solutions including IVAs, DROs, and bankruptcy to help you make informed decisions.
Swift Debt Help provides general information only and does not offer financial advice. If you need regulated financial advice, please consult a qualified adviser.
Ready to Find Out if You Qualify for Help?
Use our Solution Finder for a free, no-obligation assessment. Our team can help you understand your options and take the first step towards a debt-free future.
If you have recently completed an Individual Voluntary Arrangement (IVA), you may be wondering how to improve your credit score after an IVA. The good news is that with patience and the right approach, you can rebuild your financial standing and access credit again.
How Long Does an IVA Stay on Your Credit Report?
An IVA remains on your credit report for six years from the date it was registered. Once that period ends, it is removed automatically. Your entry on the Insolvency Register will also be cleared, which is a significant step towards a fresh start.
Keep in mind that it can take a few weeks for the records to update across all three credit reference agencies (Experian, Equifax and TransUnion). If you notice the IVA still showing after six years, contact the agency directly with a copy of your IVA completion certificate and they will correct the record.
Confirm Your IVA Is Fully Completed
Before you focus on rebuilding, make sure your IVA has been formally completed by your Insolvency Practitioner. They will confirm that all required monthly payments were made on time. If any payments were missed, the arrangement may have been extended. Once everything is settled, you will receive a completion certificate.
If you were asked to remortgage your home as part of the IVA terms, ensure that has also been resolved before you consider the arrangement complete.
Steps to Improve Your Credit Score After an IVA
1. Check your credit report for errors
Request a copy of your credit report from all three agencies. Look for any debts that were included in the IVA but are still showing as outstanding. These should be marked as “satisfied” or removed entirely. Errors like this can drag your score down unnecessarily.
2. Register on the electoral roll
Being registered at your current address gives your credit score an immediate boost. Lenders use the electoral roll to verify your identity and address, so this is one of the quickest wins available.
3. Pay all bills on time, every time
Your payment history is one of the biggest factors in your credit score. Set up direct debits for household bills, mobile phone contracts and any other regular payments. Even a single missed payment can set you back significantly.
4. Use a credit builder card responsibly
A credit builder card is designed for people with poor or limited credit history. Spend a small amount each month and pay the balance in full. This demonstrates to lenders that you can manage credit responsibly. Avoid carrying a balance, as the interest rates on these cards tend to be high.
5. Keep your credit utilisation low
If you do have access to credit, try to use no more than 25% of your available limit. High utilisation signals to lenders that you may be relying on credit to get by, which can hurt your score.
6. Avoid multiple credit applications
Each application leaves a “hard search” on your credit file. Too many in a short space of time can make you look desperate for credit. Space out any applications and use eligibility checkers (which only perform a soft search) before applying.
7. Build a savings habit
While savings do not directly affect your credit score, having a financial cushion reduces the risk of falling back into debt. During your IVA you will have grown used to living within a budget, so try to maintain that discipline and put aside what you can each month.
How Long Does It Take to Rebuild Your Credit After an IVA?
There is no fixed timeline. Some people see noticeable improvements within 12 months of their IVA ending, while for others it can take two to three years to reach a “good” credit score. The key is consistency: keep up with payments, avoid unnecessary debt and be patient.
What If an IVA Was Not the Right Option?
If you are still struggling with debt or an IVA was not suitable for your situation, there are other solutions worth exploring. A Debt Relief Order (DRO) is now available for debts up to £50,000 and the application fee has been removed entirely since April 2024, making it free to apply. Bankruptcy is another option, with the current application fee at £680. Each solution suits different circumstances, so it is important to get proper advice before making a decision.
This article is for general information only and does not constitute financial advice. If you are unsure about your options, seek guidance from a qualified debt adviser.
Ready to Find Out if You Qualify for Help?
Use our Solution Finder for a free, no-obligation assessment. Our team can help you understand your options and take the first step towards a debt-free future.
If you are struggling with debt and wondering whether an IVA (Individual Voluntary Arrangement) is right for you, it helps to understand the situations where this solution works best. An IVA allows you to make affordable monthly payments towards your debts over a fixed period, typically five or six years. Any remaining unsecured debt included in the arrangement is written off once you complete it.
This guide covers five common scenarios where an IVA could be the most suitable debt solution for your circumstances.
1. You owe debts to multiple creditors
An IVA is particularly well suited if you owe money to several different lenders. When you only have a single creditor, it is usually simpler to contact them directly and negotiate a repayment plan. A single debt is far easier to manage, and you can often reach an informal agreement without entering a formal insolvency solution.
However, juggling repayments to multiple creditors is where things get complicated. Keeping track of different payment dates, amounts and interest rates is stressful, and this is often how people lose control of their finances. With an IVA, you make one single monthly payment to your Insolvency Practitioner, who then distributes the funds to your creditors on your behalf. This simplifies everything and can result in a portion of your qualifying unsecured debts being written off at the end.
2. You can afford regular monthly repayments
Before entering an IVA, a licensed Insolvency Practitioner will carry out a thorough assessment of your finances. They will review your income and essential living costs to work out what you can realistically afford to pay each month.
If you have a steady source of income and are confident you can maintain the agreed repayments for the duration of the arrangement, an IVA is a strong option. Both you and the Insolvency Practitioner need to be satisfied that the plan is sustainable over the full term. If your income is irregular or unpredictable, you may want to explore whether a self-employed IVA structure could work for you.
3. You owe more than £6,000 in unsecured debt
An IVA is designed for people who cannot realistically repay their unsecured debts within a reasonable timeframe. If you owe a relatively small amount, improved budgeting or an informal arrangement with your creditors might be enough to get things under control.
For debts above £6,000, the picture changes. Fees are built into the IVA and come out of your affordable monthly payment, so creditors are unlikely to agree to an arrangement where you could potentially repay them in full over a similar period without those fees. If you are unsure whether you meet the threshold, our guide on how much debt you need for an IVA explains the eligibility criteria in more detail.
For those with lower levels of debt, a Debt Relief Order (DRO) may be more appropriate. Since April 2024, the DRO debt threshold has increased to £50,000 and the application fee has been removed entirely, making it accessible to more people than ever before.
4. Your employment allows it
In most cases, an IVA will not affect your job. You can continue working as normal throughout the arrangement. However, certain professions have restrictions around formal insolvency solutions.
Jobs that typically do not allow you to hold an IVA include roles in:
Accountancy
Financial services
Law
The police or military
Some employers in other industries may also have policies around insolvency. It is always worth checking your employment contract or speaking confidentially with your employer before proceeding. There are also common myths about IVAs that can cause unnecessary worry, so it is worth separating fact from fiction.
5. You want protection from creditor contact
One of the biggest sources of stress when you are in debt is the constant phone calls, letters and emails from creditors chasing payment. This pressure can take a serious toll on your mental health and often stops people from dealing with their debts at all.
An IVA provides legal protection from your creditors. Once the arrangement is in place, they are no longer permitted to contact you for payment. Your Insolvency Practitioner handles all communication and negotiation on your behalf. They draft the proposal, present it to your creditors, handle any disputes and distribute your monthly payments.
If dealing with creditors is causing you significant stress, an IVA removes that burden completely and gives you the breathing space to focus on getting back on track financially.
What other options are available?
An IVA is not the only debt solution out there. Depending on your situation, you might also consider bankruptcy (which currently costs £680 to apply for), a debt consolidation loan, or a Debt Relief Order. Each option has different eligibility requirements, so it is important to understand the pros and cons before making a decision.
If you need guidance on whether an IVA is right for you, get in touch with Swift Debt Help today and speak to a member of our team. We can help you understand your options and find the right path forward.
This article is for general information purposes only and does not constitute financial advice. If you are unsure about the best debt solution for your circumstances, please seek independent advice from a qualified professional.
Request a Debt Assessment
May not be suitable in all circumstances, Fees may apply, your credit rating may be affected.
Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.
Ready to Find Out if You Qualify for Help?
Use our Solution Finder for a free, no-obligation assessment. Our team can help you understand your options and take the first step towards a debt-free future.
An IVA (Individual Voluntary Arrangement) is one of the most popular debt solutions in the UK, and it could allow you to write off a significant portion of the debts included in an IVA. There is no upper limit on the total amount of debt you can include, but only certain types qualify. Below are 12 common debts that can be included in an IVA.
1. Catalogue debts included in an IVA
Catalogues are a convenient way of spreading the cost of purchases, but they often carry high interest rates. If repayments have become unmanageable, your catalogue debts can be included in an IVA. You would need to stop using catalogues for future purchases so you can stick to your monthly budget going forward.
2. Credit card debt
Credit card debt is one of the most common types of unsecured debt in the UK. Many people manage balances by transferring them between cards or making minimum payments, but eventually this can spiral. If your credit card repayments have become unaffordable, particularly alongside other debts, they can be written off through an IVA.
3. Personal loans
Unsecured personal loan repayments are a fixed monthly cost with little flexibility. If you took out a loan to consolidate other debts, the repayment can be substantial. Unsecured personal loans are included in an IVA, which could reduce your monthly outgoings considerably.
4. Overdrafts
Overdrafts are often used as a short-term way to cover bills or other payments, but getting out of one can feel impossible when you are already stretched. You also risk penalty charges if you accidentally exceed your limit. Overdrafts can be included in an IVA. It is generally advisable to switch your bank account to a provider you do not owe money to before starting your arrangement, as accounts with outstanding debts may be frozen.
5. Gas and electricity debt
Building up arrears with your energy supplier is more common than you might think, especially given rising fuel costs. Gas and electricity debts are unsecured, so they can be included in an IVA. This covers debts from your current property and any previous addresses. Your ongoing utility bill payments will be factored into your monthly budget assessment, so you should be able to keep up with future usage.
6. Water arrears
The rules for water arrears are the same as for gas and electricity. Any existing water debts can be included in your IVA, and your ongoing monthly water payments will be built into your budget so that future bills remain manageable.
7. Council tax arrears
Council tax arrears are classed as a priority debt because the consequences of non-payment can be severe, including bailiff action and, in extreme cases, imprisonment. These debts can be included in an IVA. If you are struggling with council tax debt, it is important to seek advice as early as possible.
8. Payday loans
Payday loans are designed for short-term borrowing, but the reality is that many people end up trapped in a cycle of high-interest repayments. If you can only afford the minimum payment each month, the debt keeps growing. Like other unsecured debts, payday loans can be included in an IVA.
9. Store cards
Store cards can seem attractive when retailers offer discounts at the point of sale, but the interest rates tend to be high. If you have balances spread across several store cards, keeping up with repayments can become difficult. Store card debts are unsecured and can be included in an IVA.
10. Income tax and National Insurance arrears
If you are self-employed (or have been in the past), you may have built up debts with HMRC for income tax or National Insurance. These can be difficult to manage alongside other creditors. Historic HMRC debts, along with the estimated liability for your current tax year, can be included in your IVA alongside other unsecured debts.
11. Tax credit overpayments
If you claim tax credits, overpayments can occur when the DWP holds incorrect information about your circumstances. These overpayments may be recovered from future payments or deducted from your wages. In most cases, tax credit overpayment debts can be included in your IVA.
12. Guarantor loans
A guarantor loan involves a friend or family member agreeing to cover repayments if you cannot. As an unsecured debt, guarantor loans can be included in an IVA. It is worth noting that the lender may pursue your guarantor for any unpaid balance, so this is something to discuss with your insolvency practitioner.
What about debts that cannot be included?
Not every type of debt qualifies for an IVA. Secured debts such as your mortgage or a hire purchase agreement cannot be included. Student loans, child maintenance arrears and certain court fines are also excluded. If you are unsure whether your debts qualify, it is worth getting professional advice. You might also want to consider a Debt Relief Order or bankruptcy as alternative options depending on your circumstances.
Need help with your debts? Get in touch today
At Swift Debt Help, we provide general guidance on IVAs and other debt solutions. We can help you understand how much debt you need for an IVA, which of your debts might qualify, and what alternative options are available to you.
Fill out the contact form below, send us an email, or give us a call to take the first step towards dealing with your debt.
This article is for general information only and does not constitute financial advice. If you need advice tailored to your situation, please speak to a qualified debt adviser or insolvency practitioner.
Ready to Find Out if You Qualify for Help?
Use our Solution Finder for a free, no-obligation assessment. Our team can help you understand your options and take the first step towards a debt-free future.
There are plenty of IVA myths circulating online that can make it difficult to know what is true and what is not. An Individual Voluntary Arrangement (IVA) can be the right solution for some people dealing with problem debt, but it depends entirely on your circumstances. Understanding the facts is essential before making any decision. Below, we tackle nine of the most common misconceptions.
1. You will not be able to open a bank account
Although you may need to make changes to your banking arrangements, that does not mean you cannot open an account at all. If you owe money to your bank through loans or overdrafts, they have the right to take money directly from your current account to pay towards the debt. This is called the right to offset. If this applies to you, you will need to open a new bank account so your budget is not disrupted.
When you open a new account, you may not be able to have an overdraft facility as that is a form of credit. This should be discussed with your Insolvency Practitioner (IP).
2. You will be forced to remortgage your property
If you are a homeowner, depending on your circumstances and the level of equity in your home, towards the end of the IVA you may be expected to attempt to release a portion of equity by way of a remortgage for the benefit of your creditors.
Any obligations relating to your property will be explained and agreed with you before you enter into the arrangement. In many cases, properties can be excluded from the terms where your equity is either of a low value or unlikely to be released by a remortgage.
Where you have significant equity but a remortgage cannot be achieved, creditors may agree to extend the IVA term in lieu of this equity.
3. All creditors need to agree to the IVA proposal
When you submit your application, your IP will help you draft a proposal for your creditors, offering to pay a certain percentage of the debt and asking that the remainder be written off. Your creditors then decide whether they agree. However, it is a myth that every single creditor must approve the proposal for the IVA to proceed.
Your creditors are not obliged to vote on your IVA proposal. Of those that do vote, only 75% by value must agree for the IVA to be approved and become legally binding on all of them.
4. You have to tell your employer about an IVA
You only need to tell your employer about your IVA if it is specified in your employment contract. Certain roles, especially those involving money handling or financial management, may require you to disclose an IVA. This includes positions such as accountants, bank staff and legal professionals. Otherwise, you are not required to inform your employer.
Details of your IVA will appear on the public Individual Insolvency Register, but your employer would only see this if they actively searched for your name.
5. You cannot obtain any credit during your IVA
It is a standard condition of an IVA that you cannot obtain credit above £500 without the permission of your IP (the Supervisor of your IVA).
During your IVA you are expected to live within a reasonable budget to ensure you can meet your agreed contribution. You should think carefully before obtaining credit of any value, as any subsequent repayments must be affordable and within your budget. Credit obtained after the approval of your IVA will not be covered by the arrangement, and you will be responsible for repaying it separately.
If you feel you need to apply for credit above £500, it is important to seek the consent of your IVA Supervisor beforehand.
6. An IVA will stay on your credit report forever
One reason people hesitate to enter an IVA is the belief that it will remain on their credit report permanently, preventing them from ever borrowing again. While it is true that an IVA is recorded on your credit file, it only stays there for six years from the date of approval. After that period, it is removed entirely.
7. Your IVA will fail if you miss a payment
It is important to make regular payments into your IVA as agreed. However, it is a myth that your IVA will automatically fail if you miss a single payment. If you are struggling, you can speak with your IP who may be able to approve a payment break, giving you some breathing space to get back on track.
Typically, if you fall into arrears equivalent to three months of payments (not including agreed payment breaks), this will be classed as a breach of the arrangement terms and your IVA could be at risk of failure. Always contact your IVA provider if you are having difficulty making payments.
8. Interest charges and fees are not frozen
Interest charges and fees can make it far harder to escape debt. One of the key benefits of a formal arrangement such as an IVA is that interest and fees on your included debts are frozen from the date the arrangement is approved. Your creditors reserve the right to re-apply any owed interest and charges if for any reason your IVA fails, but once the IVA completes successfully, all outstanding balances on included debts are written off.
9. You cannot save money while in an IVA
When you enter an IVA, you work with your provider to produce a budget based on your income and expenditure. Your creditors expect you to offer all of your monthly disposable income towards the arrangement, so putting money into savings may be difficult at the outset.
If your situation improves during the IVA, one of the key principles is that both you and your creditors share the benefit. You would get to keep half of any increase in disposable income, and you are free to use those funds as you see fit.
Other debt solutions to consider
An IVA is not the only option. Depending on your circumstances, you might also look into a Debt Relief Order (DRO), which is now completely free to apply for (the fee was abolished in April 2024) and covers debts up to £50,000 since June 2024. Bankruptcy is another route if your debts are more substantial, though the application fee is currently £680. For lower levels of debt, a Debt Management Plan (DMP) could also be suitable.
Need help separating IVA fact from fiction?
If you want more information about how an IVA works, or you need guidance on whether it is the right option for your situation, Swift Debt Help can point you in the right direction. Fill out the form below, email us or give us a call.
This article is for general information only and does not constitute financial advice. You should seek independent advice before making decisions about your finances.
Request a Debt Assessment
May not be suitable in all circumstances, Fees may apply, your credit rating may be affected.
"*" indicates required fields
Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.
Ready to Find Out if You Qualify for Help?
Use our Solution Finder for a free, no-obligation assessment. Our team can help you understand your options and take the first step towards a debt-free future.
This page provides general information only and should not be considered financial advice. If you are struggling with debt, we recommend speaking to a qualified debt adviser or Insolvency Practitioner who can assess your individual circumstances.
If you are looking to apply for an IVA (Individual Voluntary Arrangement), understanding the process is the first step towards taking control of your finances. An IVA is a formal debt solution that allows you to make affordable monthly payments over a fixed period, typically five or six years. At the end of the arrangement, any remaining balances are written off and you become debt free. This guide explains what an IVA is, how the application process works, and what you need to know before getting started.
What is an IVA and how does it help with debt?
An Individual Voluntary Arrangement (IVA) is a legally binding agreement between you and your creditors. It provides a structured way to repay some or all of what you owe over a fixed period, usually five years. You make regular monthly payments based on what you can realistically afford, and your creditors agree to write off the remainder once the arrangement is complete.
Once an IVA is in place, your creditors cannot take further action to recover money from you, which means you are protected from bailiff enforcement. Interest and charges on the debts included in your IVA are also frozen. There are several benefits of an IVA that make it worth considering if you are dealing with unmanageable debt.
At the end of the IVA, your debts are considered settled and your creditors cannot chase you for the remaining balance.
How does the IVA process work?
When you apply for an IVA, you will work with a licensed Insolvency Practitioner (IP) who manages the entire process. They start by carrying out a thorough assessment of your finances. Once they have calculated your disposable income and what you can realistically afford to repay (usually over five years), they help you draft a proposal for your creditors.
This proposal sets out a plan to repay a percentage of your debts through monthly instalments. Your creditors then vote on whether to accept the terms. If at least 75% (by value) of voting creditors agree, the IVA is approved and becomes legally binding on all parties, including any creditors who voted against it.
You then make a single monthly payment to your Insolvency Practitioner, who distributes the funds to your creditors on your behalf. This is far simpler than juggling multiple debts with different payment dates. The IP’s fees are built into your monthly payment and agreed with creditors at the outset, so there are no hidden costs.
During the IVA, certain restrictions apply. For example, you cannot borrow more than £500 without your IP’s permission. You must also keep them informed of any changes to your circumstances, as your monthly payment could be adjusted up or down accordingly. If you are wondering whether an IVA might affect your ability to buy a home in the future, you can read more about getting a mortgage with an IVA.
As long as you keep up with your repayments, the IVA will end after the agreed term and the remaining debt is written off. Missing payments can lead to an extension, so it is important to communicate with your IP if you run into difficulties. You can learn more about the implications of an IVA before making a decision.
What debts can be included in an IVA?
Most unsecured debts can be included in an IVA. For a detailed breakdown, see our guide on what debts can be included in an IVA. Common examples include:
Some debts cannot be included in an IVA. These typically include:
Student loans
Child maintenance arrears
TV licence arrears
Magistrates’ court fines
Social fund loans
Secured debts such as mortgages
How do you apply for an IVA?
The first step when considering an IVA is to seek guidance from a qualified professional. While an IVA can be an effective way to deal with unmanageable debt, it is not the right solution for everyone. Your personal circumstances, income, and the types of debt you hold all play a role in determining the best approach. To understand the minimum requirements, read our guide on how much debt you need for an IVA.
If an IVA looks suitable, the next step is to contact a licensed Insolvency Practitioner. Only an authorised IP can formally set up an IVA. They will review your finances in detail and work with you to build a proposal for your creditors.
What is the IVA application process step by step?
Step 1: Assessing your finances
Your Insolvency Practitioner begins by reviewing your full financial picture. They will need to see bank statements, payslips, details of your outgoings, and information about any assets you hold. This allows them to work out your disposable income and determine what you can afford to pay each month.
Step 2: Drafting your proposal
Using the information you have provided, your IP prepares a formal proposal for your creditors. This document outlines how much you will repay each month, the total duration of the arrangement, and what happens with any assets. If you own a property, you will not normally be required to sell it, although there may be a requirement to release equity towards the end of the IVA term if you are able to do so.
Your IP also prepares a detailed report for creditors explaining your financial position and why an IVA is in the best interests of all parties.
Step 3: The creditors’ vote
Once the proposal is ready, your IP contacts your creditors and gives them the opportunity to review the terms. This is done through a decision procedure (which replaced the old creditors’ meeting process). At least 75% of voting creditors by debt value must approve the IVA for it to go ahead. If approved, the arrangement is legally binding on all creditors, including those who voted against it.
Creditors may request modifications to the terms as a condition of their approval. You will be asked to agree to any changes before the IVA proceeds. You are not obligated to accept modifications, but rejecting them could mean the IVA is not approved.
The entire application process typically takes around three to four weeks from start to finish.
Step 4: Making your payments
Once approved, you start making your monthly payment to the IP, who then distributes funds to your creditors. You continue this for the agreed term, and at the end, any outstanding debt is written off.
Do you qualify for an IVA?
Eligibility for an IVA depends on your individual circumstances, and ultimately your creditors decide whether to approve the arrangement. As a general guide, you typically need to owe at least £5,000 to two or more creditors. You also need to be insolvent, meaning you cannot afford to keep up with your current debt repayments despite having a regular income.
Meeting these criteria does not guarantee approval, but it means an application may be worth exploring. Your Insolvency Practitioner will discuss all available options with you, including alternatives, to make sure you understand the full picture before proceeding. For a more detailed look at eligibility, read our guide on how much debt you need for an IVA in the UK.
What happens if your IVA is rejected?
If your IVA is rejected, your financial situation remains as it was before you applied. You still owe the same debts, and if you paused contractual repayments during the application, additional charges may have built up.
It is possible to submit a new application, but this is generally only worthwhile if your circumstances have changed. When a proposal is rejected, creditors usually provide reasons, which can be helpful if you are considering trying again. There is no legal limit on how many times you can apply, and an IVA can still be approved in the future even if a previous application was turned down.
If an IVA is not the right fit, there are other debt solutions worth exploring.
Alternative debt solutions to consider
If an IVA is not suitable or your application is rejected, several other options may be available depending on your circumstances.
Bankruptcy
Declaring bankruptcy can provide a fresh start by writing off most of your unsecured debts. Your non-essential assets and disposable income are used to repay as much as possible. You are normally discharged from bankruptcy after 12 months, although income payment obligations can last up to three years. It costs £680 to petition for your own bankruptcy in England and Wales.
Debt Relief Order (DRO)
A Debt Relief Order freezes all your debt repayments and interest for 12 months. It is designed for people with low disposable income, few assets, and debts of £50,000 or less. You apply through an authorised debt adviser, and the application fee is £90. If your financial situation has not improved after 12 months, your debts are written off.
Debt Management Plan (DMP)
A Debt Management Plan is an informal arrangement where you negotiate reduced monthly payments with your creditors. Unlike an IVA, a DMP is not legally binding and you repay your debts in full over a longer period. It can be a good option if you want to avoid the restrictions that come with formal insolvency solutions, and it has less impact on your ability to borrow in the future.
Need more information?
If you are struggling with debts and want to understand your options, Swift Debt Help provides general information on IVAs and other debt solutions to help you get started. For reasons an IVA could be worth it, browse our resources or use the form below to request a debt assessment. A qualified adviser can then review your situation and explain the options available to you.
The information on this page is for general guidance only. It does not constitute financial advice. Always seek professional guidance before making decisions about debt solutions.
Ready to Find Out if You Qualify for Help?
Use our Solution Finder for a free, no-obligation assessment. Our team can help you understand your options and take the first step towards a debt-free future.
An Individual Voluntary Arrangement (IVA) can be an effective debt solution if you are unable to afford your monthly repayments to creditors. Understanding the benefits of an IVA will help you decide whether this is the right path for you. In short, you make an agreement with your creditors to pay back an affordable amount over a fixed period, typically five years, and any remaining balance is written off at the end.
Below are seven key IVA advantages worth considering before you make a decision.
1. What you repay is based on your affordability
You will work with an Insolvency Practitioner when entering into an IVA, and they will negotiate with your creditors on your behalf. They assess your finances to work out what you can realistically afford, then make an offer to your creditors. Usually, your IVA will offer them a return that is lower than the total debt owed. However, the amount you repay is still likely to be higher than it would be if you declared bankruptcy.
If your Insolvency Practitioner thinks that an IVA is the right option, they will help you draft a proposal containing a reasonable offer that works for both you and your creditors. Insolvency Practitioners work with creditors every day and would only agree to propose an IVA if they believe it has a reasonable chance of being accepted. You can learn more about eligibility in our guide on how much debt you need for an IVA.
2. Manageable monthly repayments
Your monthly payments are calculated based on your income and financial responsibilities at that point in time. In other words, you only pay what you can realistically afford each month, making IVAs an affordable debt solution. You will be able to clear your debt while also meeting your other financial obligations. If your circumstances change during the arrangement, it is possible for your payments to go up or down depending on your affordability at the time.
3. Creditors can no longer contact you
For many people, being chased by creditors is incredibly stressful and makes dealing with debt much harder. Once you enter into an IVA, your creditors can no longer demand payment from you. They are also barred from taking legal action against you, such as filing for a County Court Judgement. The agreement is legally binding, so you have protection against creditors for the full duration of the IVA.
You may still receive contact from creditors in the first few months of your IVA. This is usually because they have not yet updated their records. If this happens, simply inform them that you are in an IVA and direct them to your Insolvency Practitioner.
4. Interest and charges on unsecured debt are frozen
Some people find themselves trapped in debt because their monthly payments only cover the interest. The principal amount never goes down, and late payment charges only add to the problem. It can feel like an impossible cycle to break.
When you enter an IVA, all interest and charges on unsecured debts included in the arrangement are frozen. This stops the debt from growing and means every payment you make goes towards reducing what you owe.
5. You have a clear end date
An IVA is proposed to last for a set period, typically five or six years. During that time, you make your monthly payments and comply with the terms of the arrangement. At the end, any remaining debt is written off, giving you a clean slate to start rebuilding your finances. If you miss payments, the IVA may be extended beyond the original term. As long as you meet your obligations, the fixed period gives you a clear light at the end of the tunnel. Find out more about what happens when your IVA ends.
6. Your assets are protected from bailiffs
Without a formal debt solution in place, creditors who fail to receive payment can file a County Court Judgement against you. If granted, this is one step closer to them being able to send bailiffs to collect on the debt.
Once you enter into an IVA, your assets are protected. In some cases, certain assets may be included in the IVA and sold, with the money going to your creditors. However, you can typically exclude items like your car if it is of reasonable value and needed for daily life. You will not have to sell your home, though you may be asked to remortgage to release equity. Once the IVA is in place, creditors can no longer take enforcement action against you.
7. You receive support throughout the process
When you enter into an IVA, you work with an Insolvency Practitioner who provides guidance and support. Together, you will devise a household budget to work out your disposable income and make sure your payments are affordable. If you have concerns at any stage, or questions about how to proceed once the IVA is complete, somebody will always be available to help. That ongoing support makes a real difference, especially when you are dealing with significant debts.
Are there downsides to an IVA?
There are some drawbacks to be aware of. An IVA will affect your credit score, and you will be subject to certain financial restrictions for the duration of the arrangement. You can read more about these in our article on the implications of an IVA. That said, if your creditors are chasing you and your debts feel unmanageable, the benefits of an IVA can far outweigh the downsides for many people.
Get in touch with Swift Debt Help today if you are struggling with debts. We can talk you through the different debt solutions available and help you find the right option for your situation.
This article is for general informational purposes only and does not constitute financial advice. Your circumstances are unique, and you should seek guidance from a qualified Insolvency Practitioner or debt adviser before making any decisions about debt solutions.
Request a Debt Assessment
May not be suitable in all circumstances, Fees may apply, your credit rating may be affected.
"*" indicates required fields
Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.
Ready to Find Out if You Qualify for Help?
Use our Solution Finder for a free, no-obligation assessment. Our team can help you understand your options and take the first step towards a debt-free future.
