What is an IVA?

An Individual Voluntary Arrangement (IVA) is a legally binding agreement between you and your creditors that allows you to repay what you can afford over a fixed period. At the end of your IVA, any remaining unsecured debt is written off – helping you move forward to your next chapter of your financial journey.

Key points about an IVA at a glance

• Legally binding – Once approved, creditors can’t take further action as long as you stick to the terms.
• Not a guarantee – Your IVA is only approved if at least 75% (by value) of voting creditors agree.
• One monthly payment – You pay a single, affordable amount each month – based on your budget – for up to five or six years.
• Debt write-off – Any remaining unsecured debt is written off when your IVA is successfully completed.
• Fees included – All setup and management fees are built into your monthly payment – no extra charges. Click here to know more about the fees in an IVA.
• Property protection – If you’re a homeowner, you may be asked to extend your IVA by 12 months rather than release equity from your home under the 2025 IVA Protocol[1].
• Credit rating – Your credit rating will be impacted for six years from the start of the IVA.
• Insolvency Register – Your name will be added to the Insolvency Register for the duration of the IVA plus three months after completion.
• Available in England, Wales and Northern Ireland (if you reside in Scotland, a Trust Deed is a similar solution to an IVA).

Do I qualify for an IVA?

Before recommending an IVA, we’ll carry out a free, confidential assessment of your financial situation to check if it’s the right option – or if another solution might work better. If you’re eligible for an IVA and you choose to proceed, we’ll refer you to one of our sister companies, who will explain the IVA process in detail, your responsibilities and the fees included.

What debts can be included in an IVA?

An IVA can include most unsecured debts, such as:

• Credit cards
• Personal loans
• Overdrafts
• Payday loans
• Store cards and catalogues
• Council tax and utility arrears

Some debts can’t be included, such as:

• Mortgages or secured loans
• Student loans
• Court fines
• Child maintenance or CSA arrears

How much debt is written off in an IVA?

This depends on what you can afford to repay.

Example:

You owe £20,000 and can afford to pay £100 a month. Over five years (60 months), you’d pay £6,000 in total into your IVA. This amount covers:

• What your creditors receive
• The fees for setting up and managing the IVA

At the end of the arrangement, any remaining unsecured debt is written off. In this example, that’s around £14,000.

Just remember:

• The amount you repay is based on what you can afford, not the total amount you owe.
• The fees for an IVA are included within your agreed monthly payments, so you won’t pay extra.

Can my payments change in an IVA?

Yes, your IVA is flexible if your circumstances change.

• If your income increases, your monthly payment may increase too – reducing the amount written off.
• If your income drops, your payments may be lowered – and you may write off more debt as a result.

You’ll complete an annual review to ensure your payments remain affordable.

How is an IVA set up?

1. One of our friendly advisors will assess your situation and explain your options.
2. If an IVA is right for you, we’ll refer you to one of our licensed IVA providers – either PayPlan Partnership Ltd or PayPlan Bespoke Solutions Ltd.
3. Your Insolvency Practitioner (IP) will prepare a proposal and present it to your creditors.
4. Your IVA will start if creditors holding at least 75% of the debt value (who vote) approve it and you also agree to your IVA being approved.

What should I do now?

If you’re struggling with debt, speak to us. We offer impartial advice to help you take the first step toward becoming debt-free. Call us on 0800 316 1833, speak to us over WhatsApp or get help online at payplan.com.

[1] The 2025 protocol only applies for IVAs approved after July 2025. Previous IVA protocols apply for IVAs approved before then.