How are IVA payments worked out?

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An IVA is usually a 5 to 6-year debt solution designed to help you write off the majority of your unsecured debts through regular monthly repayments.

You will work with a debt advice provider (such as PayPlan) to go over your finances and they will talk to your creditors to try and arrange an affordable payment plan. If your creditors approve the IVA proposal, the creditors included will not be able to chase you for the money owed or charge you interest and fees during your IVA term.

How are IVA payments worked out?

You and your debt advice provider will work out what is affordable to you by assessing your finances through an income and expenditure form. Once you find out what your surplus is each month, this will help to work out what you can afford to pay back to your creditors in your IVA.

You will need to be very honest when discussing your income and expenditure, as this will help form an IVA plan that is manageable and affordable for you. Your IVA term may be increased by a year if you have equity in your home.

What happens if I cannot keep up with my payments?

If you cannot keep up with your repayments, you should get in touch with your IVA company straight away. They will be able to offer you advice and may be able to work with your creditors to make your plan more affordable.

If you do not keep up with your repayments and do not get in touch with your debt management company, your IVA will be at risk of failing, and your creditors will be able to chase you for money and impose charges and interest onto your debts.

If you’re finding your IVA difficult to manage, PayPlan can help you understand your options and the next steps.

Get free debt advice today

What happens if I come into money during my IVA?

If you receive a financial windfall or inherit some money during your plan, you may be expected to contribute this into your IVA. You may have an initial reluctance to do this, but as you are entering a plan where the majority of your debts could be written off, this is a compromise you will have to make.

If you come into a considerable amount of money, you may be able make an offer to your creditors to end your IVA early, allowing you to become debt free sooner.

Learn more about settling an IVA early →

Will I pay the same amount into my IVA every year?

After each year of your IVA passes, you will have to do an Annual Review with your debt management company. This shouldn’t take too long to complete, and it’s a chance for you and your adviser to review how you are doing and to see if your circumstances have changed.

If your financial situation doesn’t change, it’s likely your monthly IVA payments will be similar for the following year. If there has been a change, your monthly payment may be amended.

Thinking about an IVA but unsure what’s right for you?

Get free debt advice online or call 0800 316 1833 to speak to one of our experts. We’ll explain the solutions available, check what you may be eligible for and help you choose the option that best fits your situation.

See if an IVA is right for me

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FAQs

What if I become seriously ill?

Please contact us as soon as possible. We know these conversations can feel difficult – but you’re not alone, and our dedicated Vulnerability Team is here to support you with care and practical guidance.

Your Insolvency Practitioner (IP) may speak to your creditors and request early completion of your IVA on compassionate grounds.

What happens if I come into money during my IVA?

If you receive a financial windfall – such as inheritance, compensation or lottery winnings – you’ll usually need to pay all of it into your IVA.

Because your creditors have agreed to write off part of your debt at the end of your IVA, any extra funds must be considered.

If the amount’s large, you may be able to offer an early Full and Final settlement.

If friends or family want to help with a lump sum, creditors may accept it as a settlement offer. It doesn’t have to cover everything you owe, but it must be fair and reasonable.

Can I settle my IVA early?

Yes – you can ask to offer a lump sum as a Full and Final settlement.

Your creditors will vote on the offer at a Variation Meeting.
Even if accepted, your IVA stays on your credit file for six years from the original start date.
It remains on the Insolvency Register for three months after completion or termination.

Early settlement can give flexibility, but you’ll still need to rebuild your credit after it completes.

Can I add debts to my IVA?

Because an IVA is a legally binding agreement, adding new debts can be difficult.

Forgotten debts: If a debt was missed at the start, it may still be possible to add it. Sometimes a second Creditors’ Meeting is required if the debt is significant.
New debts: If you’ve taken on new borrowing since your IVA began, contact us immediately. We’ll explain your options and what this means for your arrangement.

Can an IVA affect citizenship?

Your IVA will appear on the Insolvency Register, which may be visible during a citizenship assessment. It doesn’t automatically prevent approval – and in many cases, it reflects that you’re actively managing your debts responsibly.

How are IVA payments worked out?

How are IVA payments worked out?

What happens if I cannot keep up with my payments?

What happens if I come into money during my IVA?

Will I pay the same amount into my IVA every year?

Thinking about an IVA but unsure what’s right for you?

FAQs

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