Individual Voluntary Arrangement questions

Got questions about Individual Voluntary Arrangements? At PayPlan we’re happy to answer all your queries.


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You will find below a list of frequently asked questions, and if you think you need practical debt help then feel free to call us on 0800 280 2816 or click the “Get advice now” button so we can call you back.

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  1. Can anyone enter into an IVA?
  2. Will my IVA be accepted?
  3. How much does it cost?
  4. How long will an IVA last?
  5. Which debts can be included in an IVA?
  6. What happens if I can’t make the payments into my IVA?
  7. What happens if my financial situation improves during the IVA?
  8. What if I receive a windfall during my IVA?
  9. Will my partner be affected by my IVA?
  10. Who will find out about my IVA?
  11. What will happen to my pension?
  12. Can I arrange an IVA directly with my creditors?
  13. What happens if I have equity in my property?
  14. Can the creditors continue to chase me when I am in an IVA?
  15. What is an Interim Order?
  16. IVAs and Bank Accounts

  1. Can anyone enter into an IVA?

An IVA is available to all Individuals, whether they be employed or self-employed (“the Debtor“) who are experiencing difficulty in meeting contractual payments to their unsecured creditors. This is providing they have a stable income and a surplus each month after paying for basic living costs. Typically unsecured debts should total at least £7,000 owed to at least two creditors. You can discuss which debt solution is best for you by contacting PayPlan.

  1. Will my IVA be accepted?

Whether or not an IVA is accepted depends on how the creditors vote. An IVA will be accepted provided at least 75% in value of the creditors who vote on your IVA, vote in favour. If this is achieved, then the IVA is accepted and all unsecured creditors will be deemed as having agreed to your IVA, even if they reject it or do not vote at all.

Your creditors judge each application for an IVA on its own merits when they are considering their voting stance. Deciding factors may be: the value of assets, level of debt, monthly repayment offer, the expected return to creditors and the reason for the debt.

Creditors will expect a high level of commitment from the debtor during the term of an IVA. Socialising, holidays, gifts, beauty treatments or any form of savings are classed as luxury expenses and are typically not accepted by creditors as essential areas of expenditure.

Creditors also have their own criteria, which they expect an IVA proposal to meet if they are to vote in favour. The experienced PayPlan staff deal with the main banks and credit card companies on a daily basis and make every effort to tailor a debtor’s IVA proposal to meet the needs of the creditors involved.

  1. How much does it cost?

As part of the process of setting up an IVA, we will assess your income and expenditure. This will help us ascertain your monthly contributions into the arrangement, ensuring that you can afford them and giving your arrangement the best possible chance of success.

Unlike some companies that provide IVAs, our Insolvency Practitioners do not charge upfront arrangement or assessment fees. Furthermore, you only start paying once your arrangement is agreed so if for any reason creditors reject your proposals or you choose to withdraw your offer, you will not have to pay for the work that we have done for you.

The monthly payments that you make into your arrangement will cover the payments to your creditors as well as the Nominee’s and Supervisor’s fees involved in an IVA. These fees will not affect your monthly payments, as by agreeing to the terms of the IVA your creditors agree to accept a lower return from the arrangement. This means that the payments remain affordable for you.

  1. How long will an IVA last?

Normally, IVA payments are usually made into an IVA over a period of 60 months (5 years). However, an IVA may be extended to six years if you have equity in a property. 
Alternatively you may be in a position to make a Full and Final offer to your creditors. This type of IVA would usually be for a maximum period of 12 months.

An IVA will continue as long as regular payments are maintained. Defaulting on payments could result in the failure of the IVA at which point, it is possible but rare, that you could be made bankrupt.

  1. Which debts can be included in an IVA?

The following debts can be included in an IVA:

  • Bank accounts
  • Finance company loans
  • Credit or store cards
  • Outstanding Tax and VAT debts
  • Loans from friends and family

Outstanding Hire Purchase shortfall payments on goods that you no longer have (typically repossessions or write-offs)

You must however keep up full contractual payments to your secured debts and other priority debts (see below), an allowance for which will be made in your expenditure schedule.

Debts that are not normally included in an IVA are:

  • Mortgages and loans secured on your property
  • Hire Purchase Agreements (except shortfalls)
  • Magistrates Court Fines, speeding tickets etc
  • Debts incurred through fraudulent activity
  • Maintenance/CSA Arrears
  • Arrears on a rental property (however you may be able to include outstanding rent on a previous property)
  1. What happens if I can’t make the payments into my IVA?

It’s important to keep up payments as defaults can result in the failure of the IVA and it is possible, but rare, that failure may lead to bankruptcy.

When considering an IVA, it’s necessary to have a stable income that will last for the duration of the IVA, typically for 60 months (5 years). However, there could be any number of reasons to cause a reduction in income which then affects your ability to keep up payments. Examples include illness, redundancy, relationship breakdown and bereavement.

Therefore, during the term of the IVA, it’s vital that you speak to your supervisor as soon as you think you may have a problem making a payment. There may be options open to you, such as a payment break or reducing your monthly payments, but communication with your supervisor is absolutely necessary to explore these.

  1. What happens if my financial situation improves during the IVA?

The Supervisor will undertake an annual income and expenditure review to ensure the monthly payments still reflect your surplus income.

You should keep the Supervisor informed of any changes during your IVA. If there is an increase in your surplus income, your Supervisor may request up to 50% of the additional surplus, to be added to your monthly payments.

  1. What if I receive a windfall during my IVA?

Your IVA will include a ‘windfall’ clause. Any windfalls, including lottery wins, gifts or inheritance have to be declared to the Supervisor and paid into the IVA for the benefit of the creditors.

  1. Will my partner be affected by my IVA?

An IVA (Individual Voluntary Arrangement) is as the name suggests, individual to you. However if any of the debts were taken out in joint names, the other party will also be fully liable for that whole debt.

Your own liability for the joint debt will be taken care of by your IVA; however, the creditor can also pursue the other party for the full outstanding amount If you are jointly liable with your partner who is not entering into an IVA, an allowance will be made in your Income and Expenditure for them to repay the debt.

  1. Who will find out about my IVA?

Unlike bankruptcy, which will be published in the London Gazette and sometimes in your local paperIVAs are not published. This is often a reason why people favour IVAs over bankruptcy as it is kept more private.

Your IVA will however be listed on the Insolvency Register, held by the Insolvency Service. Anyone can access the Insolvency register via the Internet.

  1. What will happen to my pension?

Your state pension won’t be affected by entering into an IVA, however your personal pension payments may be.

You may only be allowed to make the minimum payments to a pension for the duration of the IVA. You would then be expected to increase your IVA payments by the amount of any saving.

If you are not able to comply with this and there is a very good reason for you to continue contributing more than the minimum payment into your pension, it may be possible for the Supervisor to negotiate with the creditors on your behalf to find a compromise.

  1. Can I arrange an IVA directly with my creditors?

No. – To be able to set up an IVA (which are regulated by the Insolvency Act 1986) you will need the services of a licensed Insolvency Practitioner (IP). The IP will also supervise your IVA throughout the duration of the Arrangement.

  1. What happens if I have equity in my property?

If you own a property with equity, you may be required to remortgage toward the end of the IVA to give your creditors an additional payment. If you are unable to re-mortgage, the IVA will be extended by up to 12 months payments.

  1. Can the creditors continue to chase me when I am in an IVA?

No, as an IVA is legally binding. Once an IVA has been approved, your unsecured creditors have no right to chase you for payments. However, they may still send you default notices and annual statements

  1. What is an Interim Order?

An Interim Order prevents your creditors from taking or continuing any legal action against you. If you have any pending court action relating to your unsecured debts, your Insolvency Practitioner may apply for an Interim Order to stop this while the proposals for your IVA are being prepared.

  1. IVAs and Bank Accounts

Whilst your IVA proposals are being prepared, you may be asked to change bank accounts. This is because the banks have something called the “Right to Off-Set” which entitles them to remove money from your bank account to “off-set” against unsecured borrowings you may have with a ‘linked’ account such as a personal loan and/or credit card.

With a number of the large banks merging over the last 20 years, it can be confusing to know if companies are linked, so we have detailed the main ones and their subsidiaries here (Linked Creditors).

By opening a new basic bank account and using a company with whom you have no financial ties, you can ensure that your income will be safe.

If you already have an independent bank account, with no borrowings or overdraft facility, it should not be necessary to change.


An IVA is a debt solution that will stay on your credit reference file for six years from the date your IVA was approved or until your IVA is completed, if it lasts for more than six years. There will be restrictions on your expenditure and Lenders may reject the arrangement. If the arrangement fails the creditors may force bankruptcy or reinstate interest and charges. If you need to release equity this may extend the arrangement and only unsecured debts will be discharged as part of the arrangement.

More Information on IVAs