Individual Voluntary Arrangement

An IVA can freeze your debts and allow you to pay them back over a set period. Debt still owed after this period is written off.

What is an IVA?

An Individual Voluntary Arrangement (“IVA”) is a legal procedure for residents of England, Wales and Northern Ireland, that allows you to make agreement with your unsecured creditors over a period of time (usually five years). It is administered by a ‘Supervisor’ who must be a licensed Insolvency Practitioner (“IP”). It is an alternative to bankruptcy.

Once you enter an IVA, creditors can take no action against you and should not contact you. Your creditors are bound into the IVA and should communicate only with the Supervisor.

In most cases an IVA will require you to pay a single monthly payment for five years. This payment is calculated only after taking account your income and expenditure and should therefore be affordable to you.

However, an IVA will affect your credit rating for six years and your information will also be placed on the public Register of Insolvencies for the duration of the IVA and removed after three months from its completion.

During the course of IVA all interest and fees associated with your debts are frozen.

At the end of the IVA the remaining unsecured debts are written off and you can begin your debt-free future. and at the end of that period any unsecured debts* are written off, provided the IVA is successfully completed. (*see ‘Debts I can write off’ below).

Will it work for me?

An IVA can be a positive way to manage your debts. There are specific criteria to enter into an IVA other than you have debts and you are able to pay your debts as an when they fall due. But at FKI we do suggest the following criteria:

  • Have £6,000 or more of unsecured debt
  • Owe money to two or more creditors.
  • Live in England or Wales
  • Have a steady income and consistently be able to make at payment of at least £100 per month
  • If you do qualify for an IVA you can stop pressure from the people you owe money to, reduce monthly payments and write off any debts remaining after the IVA is successfully completed.

What debts can be included?

Most unsecured debts, meaning debts that are not ’secured’ (tied to an asset such as your home or car), can be included in an IVA. This includes:

  • Catalogue and store card debts
  • Credit cards
  • Personal loans
  • Overdrafts
  • Gas, electricity, and water bill arrears
  • Council tax arrears
  • Income tax / National Insurance arrears
  • Tax credit / benefit overpayments
  • Payday loans
  • Debts to family and friends
  • Other outstanding bills
  • Joint debts – but the other person must also continue their payments
  • Uncleared balances from HP/finance agreements after sale of a (for example) a car.

What debts can't be included?

These include Secured debts (loans tied to specific assets) and debts specified under law:

  • Mortgages
  • Other secured loans
  • Hire purchase agreements
  • Debts incurred through fraud
  • Court fines (not to be confused with Court judgements awarded for general debts)
  • TV licence arrears
  • Student Loan Company
  • Child support Agency and other Court matrimonial awards
  • Social fund loans


  • There are no upfront fees (fees are drawn from your monthly payments or sale oaf any assets)
  • If your IVA is approved, creditors who vote against your proposal or who do not vote at all are still bound by it.
  • Creditors whose lending is unsecured can’t take any further action against you once the IVA is approved.
  • Interest and charges are frozen by law, provided you keep up your payments.
  • Our experienced staff will help you prepare your proposal, including agreeing the level of your household and personal spending.
  • You make only a single payment each month, which is distributed to creditors on your behalf.
  • If your circumstances change a payment break could be authorised or the terms of your agreement could be varied.
  • All remaining debts will be written off at the end of your IVA. Using government legislation, an IVA could help you write off up to 90% of unsecured debt.


  • Spending restrictions are put in place during an IVA
  • Not all debts can be included in an IVA, (See ‘What debts can't be included above’) but an allowance can be given to enable you to continue repaying these.
  • Creditors may not approve your IVA.
  • If you are a homeowner, you may have to release equity in the final year of the IVA through remortgaging. If you can’t remortgage, your arrangement could be extended for up to 12 months in lieu of the equity available in your property.
  • If you become entitled to any windfalls or inheritance money over and above £500 during the term of the IVA these funds are to be introduced into the arrangement.
  • If you fail to make the payments due under the terms of your IVA, your arrangement could fail.
  • If your circumstances change, the insolvency practitioner can ask creditors to agree to an amended offer. However, if creditors refuse to accept amended terms, the IVA may fail. You may then still owe your creditors the amount that you owed at the outset of the IVA, less any funds they have received during the IVA.
  • If your IVA fails, it could lead to you being made bankrupt.
  • IVAs are recorded on the Insolvency Register, which is a public register of all Bankruptcies, Debt Relief Orders and Individual Voluntary Arrangements.
  • An IVA remains on your credit file for six years after it is accepted and may have a negative effect on your credit score for up to six years.

Reduce your debt in 3 simple steps


Complete our online form

Our online form will give our advisors an insight into your financial worries.


Speak to a debt advisor

Our advisor will speak to you and advise on the debt solutions available.


Start your Debt free Journey

If you are happy, our advisors will get you started with your debt solution.

Start your debt free journey with Forest King today.