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Individual Voluntary Arrangement Advice

An Individual Voluntary Arrangement is a legally binding repayment plan made between you and your creditors that is designed to help both parties find a mutually beneficial agreement.

As with any debt program, there are both pros and cons to entering an IVA. Therefore, you should always look at the different options available in order to decide on the best plan for you. Because an IVA can be quite complicated, we have provided the following information to help you better understand the process. Of course, if you would like to speak to us in person, you can contact us via webchat, email or telephone.

How Fast can I set up an IVA?

Because a IVA is tailored to your specific situation and requirements, the time it takes to create one varies depending on your circumstances. There are many different factors that affect how fast an IVA can be instigated, with the main ones being how quickly you and your creditors can gather the required information and agree on a repayment plan. Legally, creditors are given 28 days to consider your proposal. Therefore, the entire process can often take up to two months or more to begin. To help you better understand the entire process, we are on-hand to provide you with IVA advice that is tailored to your specific requirements.

Is an IVA my best option?

IVAs are the best option for many as they are legally binding with your creditors and debt is usually cleared within 5-6 years. Assets can be kept and a payment structure is made that suits your situation. However an IVA can be very strict and needs to be kept to. If it fails then there is a risk of bankruptcy. Certain professions can also be affected by insolvency, so check your contract of employment before going forward with an IVA.  Whether you’re accepted onto an IVA or whether other options such as Debt Relief Orders (DRO) or Bankruptcy are better options, depends on certain criteria. Complete our quick online assessment to see which is best for you.

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Will I Lose my Home if I Enter an IVA?

No. You will not be forced to sell your home if you enter an IVA. However, approximately six months before the end of your IVA, an up-to-date valuation will be performed on your home to calculate what 85% of its value. This is done to see whether you could remortgage your home to free up more money to give to your creditors. If it is found that you have less than £5,000 available, you will not be required to do this. However, if you do have more than £5,000 available you will be expected to try and remortgage your home. Understanding that additional mortgage payments may prevent a further financial problem, your IVA monthly payments would be reduced to compensate for any increased mortgage payments. If you are unable to remortgage your home, your IVA may be extended for a further 12 payments. Therefore, it is always recommended that you have your IVA fully explained to you before entering such an agreement.

What Happens if my Situation Changes During the IVA?

It is understood that your circumstances can change during the IVA. Whilst small changes will not usually have much effect, bigger changes, such as the need for a large reduction in payments must first be approved by your creditors. If your situation does change and you want to try and alter the terms of your IVA agreement, it is important that you seek help as fast as possible. As a free, independent financial advisor, Debt Advice Bureau can help you with any questions you have regarding IVAs and other debt repayment programs.

Want to know more? Learn to how to get an IVA

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