Your IVA questions answered

posted by in Living with debt

This page contains information about debt solutions available in England, Wales and Northern Ireland. Debt advice in Scotland involves similar but different solutions. Before considering an IVA as a debt solution, please make sure you fully understand the risks involved when entering an IVA.

Questions and answers

Questions everything about your debts! (thanks to dullhunk)

An individual voluntary arrangement (IVA) is a legally binding form of insolvency and has proved a popular solution for problem debt over the last 10 years.

To tie in with the 25th birthday of the IVA we try and answer the most obvious questions you might have if you’re considering the IVA route…

How long does it take to set up an IVA proposal?

All IVAs are individual and set up times can vary. A lot of the time involved in setting up an IVA proposal is dependent on how quickly the client can provide the necessary paperwork for the Nominee.

A complex legal document is drafted and tailored to the individual client’s circumstances. Once the proposal is signed by the client and returned to the Insolvency Practitioner (IP) a meeting of creditors will be set up.

Legally the creditors are allowed up to 28 days to consider the proposal.

Why do I have to provide so much paperwork for an IVA?

The client’s paperwork has to be verified, to satisfy legal requirements.

The Nominee cannot do their job properly without verifying client’s documents. This also helps in having the IVA approved if the Nominee can confirm they have seen the documents mentioned in the proposal.

Do I need to swap banks on an IVA?

If you are banking with an institution that you also have a loan or other credit commitments with you should swap to safe banking facilities. This is particularly important as the bank could take funds from your bank.

If you’re unsure about this ask for assistance from the Insolvency Practitioner or their advisors.

What if all my creditors don’t accept my IVA? Or don’t vote?

An IVA is approved if 75% (in value) of creditors, who vote at the meeting, vote to accept.

This can mean that one creditor with the majority of your debt votes to accept it is legally binding on all creditors.

Most reputable IVA companies would only put forward cases that they considered had a good chance of acceptance.

If creditors do vote to reject, your IP can discuss other alternatives available with you.

I own a property, will an IVA affect this?

You would not be forced to sell your property in an IVA.

6 months before the end of the IVA we will obtain an up to date valuation of your property. Based on 85% of the value at this point we take into account what is still outstanding on your secured lending

Based on this calculation if there is less than £5,000 available you would not have to attempt to re-mortgage and your property will have been dealt with in your IVA.

If there is more than £5,000 available based on that same calculation then you will be expected to attempt to re-mortgage to release this.

However, this is based on your affordability and age because: The cost of the mortgage payment and any repayment vehicle (i.e. endowment) would not increase by more than 50% of the monthly IVA payment.

Any re-mortgage term can not be beyond the later of the state retirement age or your existing mortgage term

Your monthly payment into the IVA would reduce to accommodate the increased mortgage payments, also even if you do re-mortgage as it is based on 85% of the value you would always retain at least 15% of the equity in the property

In the event you are unable to re-mortgage (due to your age, affordability, or you are unable to obtain one), in order to compensate your creditors the IVA could be extended to make 12 extra payments or a 3rd Party could offer a lump sum.

I owe money to family/friends, will they be informed because I’m on an IVA?

If your family or friends have given you money as a gift then they will not be informed. However if you owe them money and want to repay them during the course of the IVA they can be included for a dividend like any other unsecured creditor.

They would also be allowed to vote in the IVA; although creditors may ask that friends and family step aside at the meeting for the benefit of other creditors.

What happens if my circumstances change on an IVA?

IVAs can be varied to include changes in circumstances. Larger changes such as significant reductions in income paid into the arrangement might need approval of your creditors.

What happens if I die during my IVA?

Your IVA will be terminated and  you creditors can make a claim in your estate.

If my IVA fails will I have to go bankrupt?

It is unlikely that you will be made bankrupt by your supervisor or your creditors unless your IVA was approved over 3 years ago.  However, you may choose to petition for your own bankruptcy after the IVA has failed as a solution to resolve your debt problem.

How long will an IVA stay on my credit file?

An IVA will stay on your credit file six years from the date of approval.

Got another question about IVAs?

Read the StepChange Debt Charity guide to IVAs or post them up below!

Matthew worked as an IVA drafter prior to working in social media. In a former life he wrote scripts for Eastenders, Emmerdale and Hollyoaks. He has 3 chickens, 2 dogs and a rabbit.

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Tags Living with debt
  • Amanda

    Hi, I had an IVA due to an ex partner racking up debt and leaving me to pay it. However I paid the complete balance in full with interest and charges last May. I now want to look forward and get a mortgage but its still haunting me, and will continue to do so for the next 5 years! Basically I paid off my full debt and extra charges and interest, yet I am still held under the same rules as someone who paid half the debt over the full term of an IVA. I am confused as to how there are no procedures in place for IVA’s that are paid in full within 2 years of the start date, how is it fair to still penalise someone? Surely there must be something that can be done to overturn the IVA due to the settlement circumstances. I have noticed IVA companies seem to be a law un to themselves, they also do not tell you exactly how much it ruins your life to be in/out of one of them, they prey on people who have no way out. As it stands I will still have to wait another 5 years to even have the IVA removed, despite settling it 4 years early with a full payment. I want legal advice but no one seems prepared to take them on and challenge this.

  • Diana

    I am in the process of going through an IVA due to not getting paid at work. This is due to business being slow.
    I have since found out that I am to receive some money in back pay from a pension from when my husband died 17 years ago, the pension people had been underpaying me. I want to give this money to my children so they can make use of it. Can I do this or do I have to declare it?

    • moneyaware

      Hi Diana,

      I think it’s likely to be a good idea to talk about this windfall with the people dealing with your IVA. If your IVA has started then it could be a part of your agreement that you have to pay any unexpected money into the IVA, so giving the money to your children could put your IVA at risk.

      Speaking to your provider will be the best way to work out what options you have for this money.

      Kind regards


  • Rick

    Hi there, I am paying an IVA and recently received a PPI cheque for 26k, however while I understand it goes to the creditors it has only reduced my payments by 4 months (approx 2.5k) how isthis possible?

  • Dan

    Hi, I took out an Iva 3years ago but after 2 I stopped paying due to several issues and buried my head in the sand. I’ve not heard anything from them in this time and I’m at a point where I need to sort this, can you give me any advice?

    • moneyaware

      Hello Dan

      Thanks for your message. I’m sorry to hear that you’re experiencing financial difficulty. It’s easy to feel overwhelmed but don’t worry, you’ve come to right place.

      If you previously received debt advice 3 years ago an IVA may no longer be the best solution for you. The best recommendation we can make is that you get up to date debt advice and go from there.

      Gather up details of your outstanding debts, your income and living expenses and then use our online tool – debt remedy – at the end of using the tool it will then recommend your next steps – this may be an IVA or a different debt solution.

      You’ll find it here:

      I hope that this helps.


  • Emma

    Hi, I have just had my IVA approved and my first payment has gone out, Although one of my creditors are still coming after me as they are trying to repossess a machine that was on finance, we said they could come and collect the machine before the IVA was set up and then they couldn’t collect any more money as the machine would have been worth more than the debt, They have said that they want both the machine back and also the IVA payment. Can they still do this after we have signed for the IVA and its all settled. He is threatening me with Court. Please Help!

    • moneyaware

      H Emma

      Sorry to hear that you’re having this issue.

      We’d recommend that you contact your IVA Supervisor regarding this issue, in some cases if your machine was bought on hire purchase – there may be a clause in your contract which allows them to ask for the goods back if you’re declared bankrupt. IVA is a form of bankruptcy.

      Check your agreement with the creditor, and also how many payments you made towards the goods before you agreed your IVA and then discuss this with your supervisor.


  • Martin Lindley

    Hi. I’ve had an IVA for 4 years now and just received a statement. 1 of my creditors, Barclaycard haven’t admitted or claimed the money I owed them. Can they still put a claim in now?

    • moneyaware

      Hello Martin

      Unfortunately we cannot give individual advice for people who are already in an IVA – you’ll need to speak to your IVA supervisor about this topic.


  • Soon to B

    I am 44 months into my 60 month IVA with no missed payments or payment breaks and I will be starting a nursing degree in 2 months time. How likely is it that my IVA will be closed early if I can’t afford the payments once I begin university?

    • moneyaware


      Thanks for your comment. We recommend that you contact your IVA Supervisor to discuss your situation in detail as we cannot give you individual debt advice through the blog.

      Sorry for the inconvenience,

  • Michele

    My partner and I started our iva in December 2011. We have paid each month and completed yearly reviews..the last one was last November. We were told in a phone call (to question what was happening with regards to the valuation of our house) to stop paying in December and they would be in touch. We were never asked for a valuation on our property which I believe should have been requested around may 2016. We are still waiting to hear ANYTHING. My partner was calling them every 3 weeks at the beginning of the year but we gave up as we kept getting told they’d be in touch. Our iva company appointed another company to look into any PPI claims which I believe is still ongoing. We have agreed to any PPI to be paid direct to our iva. I would like to know if we will have to wait for the PPI claims to be completed before they will tell us if we need to pay an additional year or complete our iva. We are just left hanging at the moment which I am not pleased about. I feel we should have been told before December last year as to whether we needed to pay an extra year or not and from what I can see, If they completed the iva the PPI would still be paid to them so I don’t understand why we are still waiting to hear from them. Can you offer me any advice as to where we stand please.

    • moneyaware


      Thanks for your comment. I’m afraid we can’t answer your question as it’s something you’d need to discuss with your IVA supervisor if you’re on an active plan.

      Sorry for the inconvenience.


  • Mas

    hi . I am on iVA for 2 years right now. because I wants move out of UK I sold the house and would like to know consequences to my person if I will leave this country without paying anything to IVA .please give me honest advice. I am not British but I am EU citizen.

    • moneyaware

      Hello Mas

      Sorry for not replying more quickly. We recommend you contact the company that arranged your IVA for you. They should be able to answer any questions you have and settle any legal queries.

      Kind regards