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i England, Wales and Northern Ireland only

How an IVA affects me

How will an individual voluntary arrangement (IVA) affect me?

An individual voluntary arrangement (IVA) is a legally binding agreement. It helps you pay off your debts at an affordable rate. It is a form of insolvency.

IVAs are arranged by StepChange Voluntary Arrangements, part of StepChange Debt Charity. In Scotland, a protected trust deed is a similar solution. This has different benefits, risks and fees.

An IVA has costs and fees, agreed by you and your creditors.

Fees are detailed in your IVA proposal, which an IP will assist in drafting. Any fees have to be approved by creditors. Your IP will explain what fees you need to pay for your IVA.

Our IVA costs and fees follow industry standards. There are no up-front fees, and we never charge for debt advice.

You need expert, impartial debt advice before applying for an IVA.

Do I qualify for an IVA?

Not everyone can qualify for an IVA.

They are best for people with a regular source of income.

People with a lump sum to pay towards their debts may also qualify for an IVA.

IVAs are available in:

  • England
  • Wales
  • Northern Ireland

You cannot get an IVA in Scotland.

How much debt is written off in an IVA?

Not all debts can be included in an IVA.

Debts that can be included are things like:

Debts that cannot be included in an IVA are things like:

Find out more about the debts that can be included in an IVA.

What is the minimum IVA payment?

There is no set minimum payment for an IVA but the people you owe may not accept your proposal if:

  • You can only afford a low amount
  • They do not think your offer is reasonable

It may be that another debt solution, like a debt relief order, is a better option for you.

Find out more about IVA costs, fees and charges.

How long does an IVA last?

An IVA usually lasts five years, but it can extend for another 12 months if:

Your IVA can end sooner if you make a lump sum payment.

Clare Lindley and James O'Carroll of StepChange Voluntary Arrangements are licensed to act as insolvency practitioners in the UK by the Insolvency Practitioners Association.

Considering an IVA?

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Thinking about going ahead with an IVA?

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What restrictions do I have on an IVA?

An IVA can have impact your personal, professional and financial life in several ways, including:

  • Your credit rating is affected for six years
  • Starting from the date the arrangement is agreed
  • You must keep to a budget agreed with your provider
  • This is for the full term of your IVA
  • Your IVA will be extended if you miss payments
  • This is to make up the arrears
  • An IVA could affect your employment
  • Check your contract or
  • Speak to your HR department
  • An IVA can affect any hire purchase agreements you have
  • You must declare any additional assets you receive
  • You may have to pay some of the value of these into your IVA
  • You must declare any additional income or bonuses
  • You may have to pay some of this into the IVA too
  • Your IVA is listed on the Individual Insolvency Register (IIR)
  • The register is maintained by the Insolvency Service
  • It contains personal details of people with a current IVA
  • You cannot take out any new credit over £500 during the IVA
  • Without written permission from your IP

How does an IVA affect my home?

You are unlikely to have to sell your home during an IVA.

You may have to remortgage to release equity and pay it into your IVA.

  • This depends on how much equity you have in your home
  • Your mortgage is not expected to increase to more than 85% of the value of your property
  • The mortgage is checked to make sure it is affordable

As a first-time buyer, it is harder to get a mortgage on an IVA.

Your Insolvency Practitioner (IP) can discuss this with you in more detail.

They share information about mortgaging and re-mortgaging in your IVA proposal.

What happens if I miss payments to my IVA?

Let your IP know if you cannot make your IVA payment. Do this as soon as possible.

Your IVA agreement lets you take a short payment break if you have an emergency.

Your IP you may also be able to make a small change to your monthly payments.

Your IP needs the people you owe to agree if:

  • You need a longer payment break, or
  • Your situation has changed a lot

You may be in breach of your IVA terms if you do not talk to your IP about missing payments. Your IVA could fail.

Missed payments are added to the end of the IVA term. This means your IVA takes longer to complete.

Will an IVA affect my credit rating?

An IVA appears on your credit file for six years from the date it is approved.

  • Even if you finish the IVA early
  • But it is marked as complete
  • It appears on your credit file longer if it takes longer to finish you IVA
  • It stays on until the IVA finishes

Your creditors may also record a default on your credit file.

  • This shows the original credit agreement was broken
  • It stays on your credit file for six years

This is a normal part of the debt collection process.

Find out more about how IVAs affect credit ratings.

What happens to assets on an IVA?

An asset is something you own that has value. Things like:

  • A house
  • A car
  • Jewellery
  • Savings
  • Shares

Assets are not always included in your IVA.

You must tell your insolvency practitioner (IP) about any assets.

Each IVA is different. In most cases, you can keep your:

  • Phone
  • Jewellery
  • Car
  • Home

Can I keep my car on an IVA?

You can usually keep you car, depending on the value. Your IP will check how much it is worth.

You may have to sell your car if:

  • It is worth quite a lot
  • The IP questions why you need an expensive vehicle
  • The people you owe ask you to

You are usually allowed to keep some money to buy a replacement.

You may also be asked to sell if you own two or more cars.

Cars on hire purchase

You can keep your car as long as:

  • You keep making hire purchase payments
  • The hire purchase company has no problem with your IVA
  • Check with them to make sure

The extra money that becomes available at the end of a hire purchase agreement goes into your IVA.

You may be able to take out another agreement if:

  • The vehicle has to be handed back
  • A vehicle is essential for you
  • The Insolvency Practitioner gives your permission
  • The people you owe agree

Will an IVA affected my job?

Certain jobs can be affected by an IVA. These are roles in:

  • Finance
  • Law
  • Property
  • Accountancy

To find out if you can keep your job with an IVA:

  • Check your employment contract
  • Speak to your professional membership body
  • Contact your trade union, or
  • Ask to speak to your HR department in confidence

Get free IVA advice

Get free, impartial debt advice online

Speak to your insolvency practitioner if you already have an IVA.

StepChange Voluntary Arrangements is a registered trading name of Consumer Credit Counselling Service Voluntary Arrangements Limited, a wholly owned subsidiary of StepChange Debt Charity.