Why choose PayPlan?
We’ve been helping people deal with debt for over 30 years – and we’re here to support you too.
Our experienced advisors are here to guide you through your options, without pressure or judgement.
Quick summary of an IVA
An Individual Voluntary Arrangement (IVA) is a formal agreement that allows people in debt to repay creditors with affordable monthly payments. It usually lasts five to six years, and any remaining balances of debts included in the IVA are written off at the end.
An IVA can give you a clear route out of debt, but it’s important to understand if it’s the right option for you.
Duration
Five to six years (or up to 12 months if offering one payment in full and final settlement)
Credit impact
Lasts six years from start
Included debts
Unsecured debts like credit cards, loans, council tax, etc.
Excluded debts
Secured debt like mortgages, as well as student loans, child maintenance
Cost
Fees included in monthly payments
Am I eligible for an IVA?
We’ll review your plan with you at least once a year, or sooner if your circumstances change (for example, if your income goes up or down). This helps keep your plan affordable and fair.
An IVA may be a suitable option for you if:
You have a regular income
This includes wages, benefits or pension income.
You can commit to a realistic monthly payment
It’s important that your monthly payment stays realistic for you. We’ll check in regularly and support you in updating your plan if things change.
You owe money to multiple creditors
Managing multiple repayments can be challenging – in an IVA, you’ll just need to make a single monthly payment until your IVA finishes.
How does an IVA work and what does it include?
An IVA is a formal agreement between you and your creditors that helps you manage your debts in a more structured and affordable way.
Learn more about how an IVA works →
An IVA is available if you live in England, Wales, and Northern Ireland. You may be eligible for a Trust Deed if you live in Scotland, which is a similar alternative.
Protection from creditors
Once your IVA is approved, your creditors will freeze interest and charges and stop chasing you for repayments. Your creditors can’t take legal action to recover debts included in the IVA.
One affordable monthly payment
Payments are based on what you can realistically afford, ensuring your essential living costs are covered.
We handle creditor communication
Our team will prepare and submit your IVA proposal to your creditors, and once agreed, we’ll manage the agreement and distribute payments on your behalf.
Debt write-off at completion
When your IVA ends, any remaining unsecured debts included are written off.
Benefits of an IVA
Is an IVA a good idea?
- Affordable Repayments
Payments are based on what you can afford. - Legal Protection
Creditors can’t chase you, charge interest or take legal action on any of the debts included in your IVA. - Debt Write-Off
At the end of the IVA, any remaining unsecured debts included are written off. - Home Protection
Your home and essential assets are protected.
Learn more about IVA Pros & Cons →
We’re here to help you explore all your options and recommend the right solution for you.
If your IVA is no longer right for you, we’ll work with you to explore your options – whether that means adjusting your plan or exiting your IVA in a managed way. While there’s no cancellation fee, your creditors may still pursue you for what you owe if your IVA ends early.
Restrictions with an IVA
Before choosing an IVA?
- If your IVA fails, this could result in a petition for bankruptcy. However, in our experience, this is rare.
- If you own a property and have £10,000 or more in equity, you’ll be asked to make an additional 12 payments into your IVA, extending your IVA to six years rather than five.
- There are restrictions with your expenses when you enter into an IVA.
- Your creditors may not agree to the IVA, as this isn’t a guarantee.
- There are fees for setting up and managing an IVA, which are included in your monthly payments. Learn more about IVA fees and how they work.
- Your credit rating will be impacted for six years from the start of the IVA, and your name will be added to the Insolvency Register for the duration of the IVA plus three months after completion.
- If you anticipate significant changes to your income or situation over the next few years, a different debt solution may be more suitable.
What debts can I include in an IVA?
There’s no limit to the total amount of debt or the number of accounts you may have in an IVA.
An IVA covers unsecured debts, such as:
- Bank loans
- Overdrafts
- Credit cards
- Payday loans
- Council tax arrears
Excluded debts include secured debts
Excluded debts will be prioritised in with your budget so you can continue making payments to these as usual.
If you need help with building your budget get in touch with us, you can also check out our tool BudgetSmart to help you take control, uncover extra cash in unexpected places, and stop debt from spiralling.
How much are IVA fees?
In order to set up an IVA you require the expertise of an Insolvency Practitioner and because of this there are always fees associated with an IVA, regardless of the company you chose.
The fees for administering your IVA are funded out of the money you pay into your IVA each month.
You pay the agreed amount you can afford each month, and no extra charges are added.
The amount you pay each month covers the IVA fees and charges and then the rest of the money goes to your creditors.The amount you pay each month would not change even if there weren’t any IVA charges, as that money would still go to your creditors.
Things to consider
- You would have to pay any windfalls (unexpected funds like a lottery win or inheritance) into your IVA
- Your creditors may question living costs they feel are too high or not needed. They could ask you to reduce these costs
- If you miss payments without letting us know, your IVA might fail. Legal action and payment demands from creditors could also resume and you could be made bankrupt
- You may have to sell valuable assets that you own such as cars worth more than £7,000
- If you own a property, you may need to remortgage which would then mean you pay the money you raise into the IVA
Standard IVA
Typically lasts for 60 months (five years), but it may be extended for 12 months if you have equity in your property.
Full and Final IVA →
If you have access to a lump sum (e.g. from a house sale or family contribution), you may be able to settle your debts with a one-off payment. This option typically takes up to 12 months to complete.
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Please note: Everyone’s situation is unique, and the support we provide will depend on individual circumstances.
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