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IVA process – Everything you need to know article
IVA process – Everything you need to know article
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If you have unsecured debts you are struggling to repay, you may have wondered if an Individual Voluntary Arrangement (IVA) is right for you.

But there are some things you must know before you commit to entering into an IVA because, as with most debt solutions, it can have a lasting effect on your credit history.

In this guide, we’ll outline everything you need to know about the IVA process including what an IVA is, which debts can be included in an IVA, how long an IVA takes, how the IVA process works and what happens after your IVA term comes to an end.

What is an IVA?

In England, Wales and Northern Ireland, an IVA (known as a Trust Deed in Scotland) is a legally binding debt solution between you and your unsecured creditors to repay a portion of your debt through affordable monthly payments. It is a legally binding agreement which means it is approved by the court and must be upheld by both you and your creditors.

With an IVA, the repayment plan will be based on an amount that you can comfortably afford and as agreed upon with your creditors to ensure you can make payments in full and on time without defaulting.

Unlike other debt solutions, an IVA can only be set up by a Licensed Insolvency Practitioner (IP) who will finalise the terms of your arrangement and communicate with your creditors on your behalf to ensure obligations are fulfilled on both sides. They will also be on hand to answer any questions you may have throughout the entire IVA process.

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How does the IVA process work?

The IVA process is generally straightforward and tends to take anywhere from two to six weeks to set up. Here is what you can expect when you apply for an IVA:

Initial consultation

The first stage in the IVA process is scheduling an initial consultation with a Licensed Insolvency Practitioner for free debt advice. This can be done by searching the Insolvency Service.

During this meeting, all of your available options will be discussed to determine whether an IVA is in your best interests or whether an alternative debt solution would be better suited to your financial circumstances at this time.

This will also be a great opportunity for you to ask any questions you may have about the IVA process and determine if this is the route you would like to go down.

IVA proposal

If you are deemed a suitable candidate for an IVA, your Licensed Insolvency Practitioner will ask you to provide some additional information to help them prepare your arrangement.

Once the necessary documentation has been provided, you will be sent a copy of your IVA proposal for you to review, sign and return.

Creditors meeting

When you are happy with the terms of your IVA proposal, the next step is arranging a meeting with your creditors known as a creditors meeting.

This will provide your creditors will an opportunity to vote on the proposed terms of your arrangement. If the majority agrees, your IVA will be considered approved and your Insolvency Practitioner will get to work setting up your arrangement.

IVA agreement

The next stage in the IVA process will see all interest on your debts immediately frozen and all contact from your creditors cease.

You will also now be legally protected by your IVA which means your assets are safe and your creditors will no longer be able to harass you or take legal action against you for the money owed because you have agreed to make regular payments towards the debt.

Completion certificate

Once you have fulfilled the obligations of your IVA after five years, the outstanding balance on your original debt will be written off and you will be officially released from your debts.

You will also be presented with a completion certificate to confirm that you have successfully completed your IVA and are now debt-free.

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Which debts can be included in an IVA?

Whilst IVAs remain one of the most popular debt solutions for debtors in England, Wales and Northern Ireland, only certain unsecured debts can be included. These include:

  • Overdrafts
  • Credit cards
  • Store Cardsan
  • Payday loans
  • Catalogues
  • Charge cards
  • Gas and electricity arrears
  • Council Tax arrears
  • Income Tax and National Insurance arrears
  • Benefit overpayments

However, as with most debt solutions, there are also some debts that cannot be included in an IVA. These include:

  • Secured loans
  • Mortgages
  • Rent arrears
  • Child Maintenance Service or Child Support Agency arrears
  • Magistrates Court fines
  • Student loans
  • Maintenance arrears
  • TV License arrears
  • Hire Purchase agreements

In rare cases, you may be able to include a secured loan or mortgage in your IVA if your creditor agrees but this is unusual.

How long does an IVA take?

With an IVA, your debts can be repaid in monthly instalments over the course of five years or in a single lump sum which usually takes around six months.

However, if you have over £5,000 in equity and are unable to remortgage your property when your arrangement comes to an end, you may need to extend your IVA by another 12 months for a total of six years.

Evidence of your IVA will also remain on your credit file for six years from the date it is granted during which time it will lower your credit score and make it difficult to get approved for credit.

What happens after my IVA finishes?

After you have made your final payment and have been issued with a completion certificate, your IVA will officially come to an end. At this stage, you will have no more payments to make or outstanding obligations to fulfil and will be considered debt-free.

After you leave your IVA, your Licensed Insolvency Practitioner may also provide you with free debt advice to help you readjust to life after debt, improve your credit score and, more importantly, avoid finding yourself in a situation where you require the services of a Licensed Insolvency Practitioner again in the future.

Where can I get more advice on IVA process – Everything you need to know 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 7 2023

Written by
Maxine McCreadie

Edited by
Maxine McCreadie