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Individual Voluntary Arrangements

If you are interested in entering into an Individual Voluntary Arrangement (IVA) to help repay your debts, you have come to the right place.

Our insolvency solicitors have substantial experience advising people about IVAs and assisting with the necessary arrangements and negotiations. We have advised on some of the most complex IVAs in the UK and regularly handle cases involving high-value debts.

We can help you decide whether an IVA is right for you, and we’ll also make sure that you’re fully informed about all your available options. That way, you can make a confident decision about moving forwards and can start looking forward to a debt-free life.

We’ll then guide you through the entire process, liaising with the Insolvency Practitioner (the person who will assist you in drafting your IVA proposal) and advising on arrangements with your creditors. We’ll make sure that the final IVA is in your best interests.

We also provide advice to creditors in relation to IVAs and to Insolvency Practitioners. Visit our Lender and Creditor Services and Insolvency Practitioner pages for more information.


Why choose our expert insolvency solicitors for advice about Individual Voluntary Arrangements?

Independently recognised expertise

Our legal specialists are market leaders in this area with consistent recommendations in prestigious client guides, Chambers & Partners and the Legal 500.

A bespoke personal insolvency service

We are proud to deliver a warm, welcoming personal insolvency service for individuals going through debt issues. Dealing with debt can be daunting and is often very stressful, so it’s important to have the right support throughout the process.

We are confident that we can assist in your case, no matter how complicated. We have a strong track record for handling complex and high-profile IVA matters.

A complex area of law explained in plain English

Your IVA solicitor will set out your legal options in simple terms, ensuring that no stone is left unturned, so you are fully informed from day one. We will always keep you up to date on the latest developments in your case, no matter how small, and respond to your calls and emails as swiftly as possible.

What is an Individual Voluntary Arrangement?

An Individual Voluntary Arrangement (IVA) is a legally binding agreement an individual can enter into with their creditors to repay some or all of their debts.

Under an IVA, you agree to make payments to an Insolvency Practitioner, who splits this money between your creditors. The Insolvency Practitioner agrees on what you can afford to pay and how long the IVA should last (this is often around five years depending on your debt and how you agree to repay). If 75% of your creditors agree to the IVA, they will all be bound by it, even most of the ones who did not agree.

Even if you have not repaid all of your debts in full by the end of the IVA, provided you have complied with the terms of the IVA, the rest of your debts will be written off. However, you must keep up with the agreed payments. If you do not, the Insolvency Practitioner can end your IVA and even make you bankrupt.

What is the difference between an IVA and bankruptcy?

IVAs are typically used as an alternative to bankruptcy and involve coming to an agreement with your creditors about repaying your debts. Bankruptcy is normally only suitable if you can’t pay back your debts in a reasonable time or reach such an agreement with your creditors.

In bankruptcy, assets you own, such as your house or car, will usually be sold to pay off your debts. IVAs are usually more flexible, give you more control, and can take your personal circumstances into account. For example, if you need your car to get to work, you may be able to negotiate this with your creditors.

You can also carry on using your bank account under an IVA. If you are made bankrupt, your bank account will usually be closed, which can obviously make your life more difficult.

There are different risks and benefits to both bankruptcy and Individual Voluntary Arrangements. An IVA may not automatically be better than bankruptcy, so it is important to seek legal advice before committing.

Is an Individual Voluntary Arrangement right for you?

An IVA can significantly reduce the pressure on you if you are having problems with outstanding debt. For example:

  • An IVA binds your creditors into an agreement, and they cannot chase you while the IVA is in place;
  • You pay your regular payments or lump sum(s) to the Insolvency Practitioner rather than having to stay on top of multiple payments to multiple creditors; and
  • You will usually end up paying less than your total outstanding debt because the creditors agree to accept part payment.

However, IVAs are not right for everyone:

  • There are several fees associated with entering into an IVA, including a set-up fee and a handling fee each time you make a payment. So, an IVA may only make financial sense if you have significant debts over £10,000;
  • Certain debts cannot be included within an IVA. For example, secured debts such as mortgages usually have to be repaid separately, and you may even be asked to remortgage your home to pay towards the IVA;
  • IVAs also usually last a long time, often around 60 months (five years), and can be extended by another 12 months. If you are expecting to come into some money in the near future, for example, an inheritance or pension withdrawal, most of it will go to your creditors if your IVA is still in place; and
  • IVAs are made public by being added to the Individual Insolvency Register, just like bankruptcies. So, this option may not be right for you if your aim is to sort out your debts privately.

Our insolvency solicitors can provide clear, practical advice about whether an IVA may be right for you.

Are you eligible for an IVA?

You must fulfil certain criteria to be able to get an IVA. For example, you need some spare income left over each month (usually at least £100). If you are not able to make meaningful payments, your creditors probably won’t agree to your IVA. We can advise on whether you are likely to be eligible for an IVA.

What debts can an IVA cover?

IVAs can cover a wide range of debts, including loans, credit cards, overdrafts and outstanding bills.

Secured debts such as mortgage or rent arrears may be included in an IVA if the creditor agrees. Usually, creditors will not agree to give up the benefit of their security.

You cannot include:

  • Child maintenance or court-ordered maintenance arrears
  • Student loans
  • Magistrates’ Court fines
  • Social Fund loans
  • TV licence arrears

These debts will need to be dealt with separately and paid alongside your IVA payments. It is worth considering whether you have other options before proceeding with this. Our insolvency lawyers can set out all your options, explaining the benefits and drawbacks so you can make an informed decision.

If you have any joint debts with other people, your IVA will only cover you, so the other person/people will be responsible for the entire debt. Unless you and the other debtors are all able to enter into IVAs (referred to as ‘interlocking Individual Voluntary Arrangements’), including joint debts may not be the best option.

Does an IVA affect your credit rating?

Entering into an Individual Voluntary Arrangement means that you may find it hard to get credit while the agreement is in place.

Creditors can check whether you have an IVA by searching the Individual Insolvency Register. Your IVA will usually stay on the Register until three months after it has ended.

If you want to apply for more than £500 of credit, you also need written permission from the Insolvency Practitioner unless the credit is for utilities such as electricity.

Contact our IVA solicitors

For clear, practical advice about dealing with debt, including Individual Voluntary Arrangements, please speak to our expert team in London, Portsmouth or Norwich today.