IVA (Individual Voluntary Arrangement)

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.

Here’s a quick overview:

• 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

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.

What is an IVA?

An Individual Voluntary Arrangement (IVA) is a debt solution designed to help you reduce and manage your debts.

If you’re struggling with multiple debts, an IVA can offer a clear path to clearing your debts while protecting your assets.

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.

Here’s how it works:

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.

Note: 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.

Am I eligible for an IVA?

An IVA may be a suitable option for you if:

• You have a regular income: This includes wages, benefits or pension income.
• 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.
• 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.

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.

Is an IVA a good idea?

Benefits of an IVA

• 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.

What should I think about before choosing an IVA?

What are the risks or downsides of an IVA?

• If your IVA fails, this could result in a petition for bankruptcy. However, in our experience, this is rare.[1]
• 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.
• 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.

We’re here to help you explore all your options and recommend the right solution for you.

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 (like mortgages), court fines, student loans and child maintenance arrears. Instead, we’ll prioritise these within 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.

See the full list of debts that can and can’t be included in an IVA.

How long will an IVA last?

• 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.

Why choose PayPlan?

We’ve been helping people deal with debt for over 30 years – and we’re here to support you too.

• Over 500,000 people helped since we started
• More than 100,000 people received free, confidential debt advice last year, some debt solutions can include a fee, which you’ll be informed of before
• In 2023, we helped clients write off an average of 82% of their total debt in IVAs[2]

Our experienced advisors are here to guide you through your options, without pressure or judgement.

Hear from people we’ve helped

We’ve supported thousands of people in becoming debt-free.

Read real reviews and see how we’ve supported others like you on their journey to becoming debt-free.  

“PayPlan saved me, I was badly in debt and unable to pay it off, unable to sleep and fell into depression. Someone mentioned PayPlan, I called them and everything changed, they were understanding and listen to my problems without judging. They came up with a plan I can afford and have talked me through every stage since. I cannot thank them enough, they took me from a very dark place to a good place. If you’re in financial trouble, talk to them!”
Feefo review, April 2025

Read more reviews →

You can also check out reviews clients have left us on Trustpilot and Google.

Please note: Everyone’s situation is unique, and the support we provide will depend on individual circumstances.

FAQs

Want to know more? We’ve answered some of the most common questions about IVAs to help you decide if it could be the right option for you.

Will an IVA affect my credit file?

Yes – an IVA will stay on your credit report for six years from the start date. But, once complete, the debts included in your IVA are cleared and you can begin rebuilding your credit score.

Will my IVA be visible to others?

Your IVA will be recorded on the Insolvency Register, which is publicly available. However, someone would need your full name to find your record. It’s removed three months after your IVA ends.

Can I change my IVA if my income changes?

Life isn’t always predictable, and your IVA can adapt. If your income drops, your expenses rise or something unexpected happens, let us know. We’ll help you review your plan and may be able to reduce or pause your payments for a short time. We’re here to support you for the full journey.

Read more FAQs →

Next steps: Get online debt advice to see if an IVA is right for you

Dealing with debt can feel overwhelming, but you’re not alone. Our experienced debt advisors are ready to help you explore your options and recommend the right solution for your circumstances.  

Get debt help online or call us on 0800 316 1833 for a confidential conversation.

[1] This data was correct as of August 2025.

[2] This depends on your personal circumstances and making all agreed payments throughout the IVA term.