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What is an IVA

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Individual voluntary arrangement (IVA) or DMP?

Individual voluntary arrangements (IVAs) and debt management plans (DMPs) both allow you to make affordable payments to your debts. But these debt solutions have a lot of differences and they can affect you in different ways.

IVAs are arranged by StepChange Voluntary Arrangements, part of StepChange Debt Charity.

An IVA is a form of insolvency and a legally binding debt solution. A DMP is an informal arrangement with your creditors.

Before going ahead with a debt solution, it’s important get free and impartial debt advice, to make sure you understand the options that are suitable for your circumstances and how you may be affected.

Need help with your debts?

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Thinking about going ahead with an IVA?

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How could an IVA help me?

An individual voluntary arrangement (IVA) is a formal agreement between you and your creditors that can help you pay off your debts in affordable monthly payments, usually over five or six years. There is also the option of making a one-off payment, known as a lump sum IVA.

In Scotland, a protected trust deed is a similar solution, but has different benefits, risks and fees associated with it.

You can only get an IVA with the help of an insolvency practitioner. As it's legally binding and recorded on the IVA register, you’re protected from further action from your creditors as long as you keep up with your payments.

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.

No matter who arranges your IVA there are associated costs and fees. Our IVA costs and fees follow industry standards and, at StepChange Voluntary Arrangements, there are no up-front fees, and we won’t charge you for debt advice.

warning iconIf your IVA fails, creditors may request the supervisor of your IVA petitions for your bankruptcy, although this is rare.

At the end of your IVA, the ‘unsecured debts’ included in your IVA will be written off.

Find out more about getting an IVA.

How could a debt management plan help me?

A debt management plan (DMP) is a debt solution that can help you pay back your debts at an affordable rate and over a reasonable period of time, usually no more than 10 years.

A DMP is an informal agreement, so your creditors don’t have to agree to it and they’re not obliged to stop contacting you. However, most creditors will accept your payments and agree to stop or reduce interest and charges while you’re paying them through your DMP.

Find out more about getting a DMP.

How do I find out if an IVA or DMP is right for me?

You should always get free and impartial debt advice to find out which ways of dealing with your debts are best suited to your circumstances.

There are lots of adverts for companies who make bold claims about “writing off debt with government debt solutions”, such as IVAs. The Advertising Standard Authority has taken action against such advertisers, whose ads can be misleading and often promote the debt solutions that are most profitable for them.

A debt advisor will look at a number of things before recommending a debt solution to you, including:

  • How much you owe and which types of debt you have
  • Whether your assets or job could be affected by a certain solution
  • How much you can afford to contribute to paying off your debts
  • If you think your circumstances might improve over the next few years

How do I apply for an IVA or DMP?

When you’ve completed your debt advice session with us, you’ll get a ‘personal action plan’ with a guide to setting up your recommended debt solution. We’re on hand to support you as you deal with your debts and can set up and manage both DMPs and IVAs for you.

If an IVA is the best solution for you, we have our own IVA company, StepChange Voluntary Arrangements, who can deal with your IVA for you.

Ready to get started? Online debt help.

Can you change from a DMP to an IVA?

If your circumstances have changed after you’ve been recommended a DMP and started setting one up, you should contact your DMP provider.

If your circumstances change meaning a DMP may no longer be suitable to you, this could be because you:

  • can now go ahead with insolvency without this having a negative impact on your job or home
  • can now contribute by making a lump sum IVA payment
  • have found that your DMP is taking too long for you to pay off

Your DMP provider will then need to review your situation again and make revised recommendations, which may or may not be for an IVA.

Find out more about managing a DMP.

Need help with your debts?

mum at the table with bills

Thinking about going ahead with an IVA?

We're here to help. Free, online debt advice available now.

Get debt help

"Get in touch with StepChange, you'll wish you'd done it sooner" Rob, Wiltshire

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