Individual Voluntary Arrangements: how an IVA works
Published · 3 min read · Figures checked . UK rules and rates change, so check the official sources below before you act.
An Individual Voluntary Arrangement, or IVA, is a formal deal to repay some or all of your debts through an insolvency practitioner. This guide explains who arranges it, how creditors approve it, what it costs and what happens if payments stop.
Who this guide is for
This guide is general information for people in England, Wales and Northern Ireland who want to understand what an IVA is. It is not advice about your own situation. It does not cover Scotland, where GOV.UK points to different formal options, such as the Debt Arrangement Scheme. It also does not cover other routes such as Debt Relief Orders or bankruptcy, which work differently.
The details below were checked on GOV.UK and the nidirect website on 14 October 2026.
What an IVA is
GOV.UK describes an IVA as an agreement with your creditors to repay all or part of your debts. You make regular payments to an insolvency practitioner, and they share the money out between the people you owe. GOV.UK says an IVA can give you more control of your assets than bankruptcy.
Only an authorised insolvency practitioner can set up an IVA. You cannot arrange one on your own. The Insolvency Service keeps a directory of practitioners, which is linked from GOV.UK.
How an IVA is set up
- You tell the practitioner about your assets, debts, income and creditors.
- The practitioner works out what you can afford to repay and how long the IVA should last. GOV.UK does not give a fixed length.
- The practitioner contacts your creditors with a proposal.
- The IVA starts if creditors holding 75% of your debts agree to it.
Once it is approved, the IVA applies to all your creditors, including any who voted against it.
What it costs
GOV.UK says there are usually two fees: a set-up fee and a handling fee for each payment you make. The page does not give amounts. Costs differ between practitioners, so it can be worth asking for the full cost in writing before agreeing to anything.
What an IVA does
- Creditors generally cannot take action against you for the debts included. nidirect says this includes court action or bankruptcy proceedings, and that interest and charges are usually stopped.
- If you run a business, GOV.UK says you may still be able to keep it going.
- The IVA is listed on the Individual Insolvency Register, which anyone can search. nidirect says credit reference agencies use the register to update your credit rating, and that it can make it harder to open bank accounts, get loans or buy on credit.
If payments are missed
GOV.UK says the practitioner can cancel your IVA if you do not keep up your repayments, and can also make you bankrupt. nidirect says creditors can cancel it too, and may then take court action. If money gets tighter, nidirect says to tell your practitioner, who may be able to negotiate lower payments.
Free help before deciding
An IVA is one of several formal options. GOV.UK lists others, including debt management plans, Debt Relief Orders and bankruptcy. A debt adviser can explain how each option works for a particular situation. Free, independent help is available from MoneyHelper, StepChange, National Debtline, Citizens Advice and, in Northern Ireland, Advice NI. If you feel overwhelmed by debt, you are not alone, and getting free advice early is common.
Check before you act
Rules, fees and thresholds change, and practitioners set their own terms. It is worth confirming everything on the official pages linked below before relying on anything here.
Sources
For information only. See our disclaimer and editorial standards. Spotted an error? Tell us.
