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How much does an IVA leave you to live on? article
How much does an IVA leave you to live on? article
Creditfix > Knowledge Hub > > How much does an IVA leave you to live on?

When it comes to IVAs, one of the most common questions is how much money you will have left over after you have made your monthly payment.

Whilst they are one of the most affordable debt solutions out there and you will never be made to pay more than you can comfortably afford, it’s completely normal to wonder how much of your monthly income will go towards repaying your debts.

In this guide, we’ll let you know how much an IVA will leave you to live on so you can put your mind at ease and take the first step towards fixing your finances for good.

What is an IVA?

Before you know how much an IVA will leave you to live on, it’s worth familiarising yourself with what an IVA is and how it can help you become debt-free.

Here's an example of how we can help

Let's say you owe...
Bank Loans £11,152
Short Term Loans £2,226
Phone Bills £302
Credit cards £2,395
Store cards £648
Phone Bills £1,408
Overdraft £172
Total amount £18,303

Customer monthly repayments before and after an IVA

Before IVA - £470

Before IVA - £115

Reduced By 72%

* monthly payments are based on individual financial circumstances

Put simply, an IVA is a popular debt solution and formally-binding agreement between you and your creditors that can allow you to clear your debts by paying less than what you owe. Depending on your financial circumstances, you can make monthly payments or pay the agreed-upon amount in a single lump sum payment.

Unlike other debt solutions, an IVA can only be set up and managed by an Insolvency Practitioner who will act as the middleman between you and creditors to ensure the terms of the arrangement are adhered to on both sides.

Will an IVA affect my credit rating?

Like most debt solutions, an IVA will be noted on your credit file for a total of six years from the date of approval.

During this time, it will lower your credit score which can make it difficult to get a loan, mortgage or further credit.

However, there are steps you can take to rebuild your credit after exiting your IVA and creditors may be more likely to give you credit if you have proven you can make your monthly payments in full and on time.

What does an IVA cost?

How much an IVA costs will differ from person to person but the amount will be included in your IVA proposal and you will always be informed of the total cost of your arrangement before your IVA is approved and you start making payments.

What’s more, any costs towards your IP will be included in your monthly payments so there will never be any hidden or unexpected fees to pay.

Aside from your monthly repayments, you can expect to pay a Nominee’s Fee and a Supervisor’s Fee.

Nominee’s Fee

The Nominee’s Fee is paid directly to your creditors during the first year of your arrangement (usually within the first five months) and covers the time and expertise needed to put together your IVA proposal.

The amount will vary depending on the agreement you come to with your creditors but typically ranges from £1,000 to £2,220.

Supervisor’s Fee

The Supervisor’s Fee is paid following the approval of your IVA and will be paid in monthly instalments alongside your usual payments to account for the specialist work that will be carried out during your term.

The amount can vary but will never be more than 18% of your total contributions over the course of your entire IVA.

How much will my monthly payments be?

IVA payments are always based on affordability rather than how much debt you owe.

Because of this, you will only ever pay an amount you are comfortable with, leaving you with enough money left over for your day-to-day living expenses.

In order to calculate the terms of your arrangement, your essential living costs (food, bills, travel etc.) and priority debts (mortgage arrears, rent arrears etc.) will be subtracted from your total monthly income.

This will let your creditors know how much you can realistically afford to pay towards your debts every month once your living costs have been taken into account.

In most cases, your monthly amount will equal at least 25% of your total debt level once your five-year term has come to an end which is usually the minimum IVA payment creditors will agree to.

What is an Additional Income Threshold?

When your IVA has been approved, your IP will calculate how much money you can earn before you must put it towards your arrangement.

This is known as an Additional Income Threshold and is usually around 10% of your monthly income.

For example, if you earn £1,000 a month, you can only earn an extra £100 without needing to pay it into your IVA.

However, if you earn an extra £125 above your usual monthly income, 50% of it must be paid into your IVA.

This can be a great way for you to save whilst repaying your debts at the same time – something which can be extremely difficult to do with other debt solutions.

There are also some IVA spending restrictions you must abide by during your term such as never borrow money of more than £500 without consent from your IP.

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How much money will I have left over?

Once you have paid your monthly living expenses, your creditors will expect any leftover money to be paid into your IVA.

For example, if you earn £1,800 a month and your total living costs come to £1,600, £200 must be paid towards your IVA every month.

This will reassure your creditors that you are paying as much as you can towards your debt and are not spending money on non-essential expenses such as meals out, holidays or luxury goods.

Can my IVA payments be reduced?

If you are struggling to survive on the amount left over once your IVA has been paid, it may be possible to lower your monthly payments.

This can be done by your IP if a reduction of 15% or less is required but if you want to reduce your payments by 15% or more a month, your IP must receive permission from your creditors and this can incur an additional fee.

Alternatively, your IP may also be able to help you defer one of your monthly payments, pay less than usual for a set amount of time, pause your payments for a certain period or, in some cases, even settle your IVA early.

Where can I get more advice on How much does an IVA leave you to live on? and other debt solutions?

To discuss your options and get the support you need to deal with your debt today, contact us now on 0800 0431 431 or click the button to get started

Maxine McCreadie

Maxine is an experienced writer, specialising in personal insolvency. With a wealth of experience in the finance industry, she has written extensively on the subject of Individual Voluntary Arrangements, Protected Trust Deed’s, and various other debt solutions.

How we reviewed this article:


Our debt experts, and insolvency practitioners continually monitor the personal finance and debt industry, and we update our articles when new information becomes available.

Current Version

February 16 2023

Written by
Maxine McCreadie

Edited by
Maxine McCreadie