What Are The Implications Of An IVA?

Updated March 2026

An Individual Voluntary Arrangement (IVA) is a formal debt solution that typically allows you to make repayments you can afford, over a set period, with any outstanding debt written off at the end of the agreement. Understanding the implications of an IVA before you commit is essential, as the arrangement will affect several areas of your life for five to six years.

Every case is unique. Before making any decisions, it is important to consider the wider implications of an IVA and whether other options like bankruptcy or a Debt Relief Order may be a better alternative. There are a number of ways that an IVA will impact your life and your financial situation.

How will an IVA impact your job?

Usually, an IVA will not impact your job, but there are important exceptions. If you work in a position of financial responsibility (bank clerk, accountant, solicitor, etc.) it is expected that you uphold a certain level of personal financial stability. In this case, an IVA may affect your job and you may not be able to continue in that position until it has finished. Some other positions of responsibility, like working for the police and prison service or the fire brigade, may also be affected. If you own a business, you can continue operating, although it will be harder to obtain credit.

Before entering into an IVA, speak to your employer and review your employment contracts to determine whether you are affected. You can also check the GOV.UK guide to debt options for more information on how insolvency may affect your employment.

Does an IVA impact your future income?

This depends on your career plans. If you want to enter one of the careers listed above, it could be a problem. Otherwise, it should not impact your future income.

However, if you are planning to sell assets during your IVA, you may have to put some or all of the income from the sale towards debt payments. Your Insolvency Practitioner will guide you through how any windfalls or pay rises are handled during the arrangement.

How will an IVA affect your possessions and assets?

When you enter into an IVA, you must declare all of your assets to your Insolvency Practitioner, who will work with you to draft your offer of repayment to creditors (your ‘Proposal’). All of your significant assets will be listed within the proposal, as creditors need to see an accurate reflection of your financial circumstances to decide whether your offer is reasonable and fair. There is no legal requirement for you to sell or surrender any particular assets, although creditors are unlikely to agree to write off debt if they believe your assets are of excessive value.

If you are a homeowner and have equity available in your property, it will be expected that your proposal includes your agreement to attempt to release a portion of this towards the end of your IVA. The inclusion of home equity, as well as any other significant assets, will be discussed and agreed with you during the process of putting your IVA proposal together.

Can you get a mortgage with an IVA?

Getting a mortgage during your IVA can be difficult. You must seek approval from your Insolvency Practitioner if you want to borrow more than £500.

An IVA (as with any form of insolvency) is recorded on your credit file for six years from the date it is approved, and is publicly available on the Insolvency Register. A mortgage lender or broker will assess your application against their lending criteria, and the fact that you have been declared insolvent could affect whether a mortgage is available to you or the rate offered. For a detailed look at your options, read our guide on how to get a mortgage after an IVA.

How long does an IVA stay on a credit file?

An IVA stays on your credit report for six years from the date of approval. After that period, it is removed automatically. You can then begin rebuilding your credit score. Our guide to improving your credit score after an IVA covers practical steps you can take once the arrangement ends.

Does an IVA affect financial mis-selling compensation?

In many cases, as part of your proposal to creditors, the Insolvency Practitioner will agree to pursue potential claims on your behalf. Any money that you are awarded is considered an asset of the IVA and will help repay the creditors included in the arrangement.

What other restrictions does an IVA have?

An IVA has other restrictions that you should be aware of when making your decision:

• Missed payments: you must maintain payments towards your IVA. If you miss the equivalent of three monthly payments without any agreed payment breaks being sanctioned by the Insolvency Practitioner, you will be in breach of the terms of the arrangement. If this is not remedied, your IVA may fail. Any payments agreed to be missed still need to be paid at the end of the arrangement, meaning it could last longer than initially proposed.
• Taking out additional credit: you are unable to take out any additional credit of more than £500 without the prior consent of the Insolvency Practitioner. This includes catalogues and overdrafts.
• Budget restrictions: when proposing your IVA, you are required to put all of your surplus income towards debt payments and live within a budget. During the lifetime of the IVA, if your financial situation improves, you are required to disclose this to the Insolvency Practitioner and your payments may increase.
• Gambling and new debt: you are expected to avoid gambling and taking on new financial commitments that could jeopardise your ability to maintain payments.

Is an IVA worth it?

There are a lot of IVA advantages to consider. You can write off a significant portion of your debt in some cases, and you will avoid high-interest payments. Ultimately, it allows you to clear your debts and work towards a more stable financial situation.

On the other hand, you must consider the IVA disadvantages when weighing up your options. It does impact your life and finances in a number of ways and you should think carefully about whether you are willing to deal with the implications. For a broader look at the positives, take a look at our article on the 7 benefits of an IVA.

In the end, it all comes down to your own personal financial situation. At Swift Debt Help, we can advise you on whether an IVA is the right option for you and take you through the alternatives if it is not. Fill in our form below to find out if you are eligible for an IVA.

Where to get free debt advice

If you are unsure whether an IVA is right for you, several organisations offer free, impartial debt advice:

• Citizens Advice: free guidance on all debt options
• StepChange Debt Charity: a leading UK debt charity offering free online and telephone advice
• MoneyHelper: government-backed service with tools and guides
• National Debtline: free expert advice by phone and online