Individual Voluntary Arrangements

known as IVA

An Individual Voluntary Arrangement (IVA) can only be set up and administered by a Licensed Insolvency Practitioner (IP).

An IVA can be a very effective way to deal with your debts. However, there are both advantages and disadvantages to IVAs.

What is an IVA?

An Individual Voluntary Arrangement (IVA) is a legally-binding arrangement to pay an agreed amount off your debts over a set period.

Any unpaid parts of the debts that were included in the IVA are written off when the arrangement is completed.

An IVA can be set up in a number of different ways. It can either be a monthly installment plan over a fixed term (normally five years), or a short term arrangement if you have a lump sum to put forward.

Some IVAs are a mixture of both installments and a lump sum.

At a meeting of your creditors have to vote on whether to accept the IVA. Often creditors send their vote to the IP and don’t actually come to the meeting. Most meetings of creditors are held over the telephone.

Your IVA proposal has to be accepted by more than 75% ‘by value’ of the voting creditors for it to become legally binding on all your creditors. ‘By value’ means voting creditors who hold more than 75% of your total debt, not the number of creditors you have.

The insolvency practitioner will charge fees for preparing, negotiating and administering your IVA. Before the practioner asks you to sign up to an IVA, they will give you details of the fees they want to charge you and how these must be paid – whether as a lump sum or from the payments you make into the IVA.

Advantages of an IVA

  • Creditors who vote against your proposal are still bound by it.
  • Creditors whose lending is unsecured can’t take any further action.
  • Interest is usually frozen as long as you keep up your payments.
  • Your insolvency practitioner will help you prepare your proposal, including agreeing the level of your household and personal spending based on guidelines acceptable to creditors.
  • You make only a single payment each month. Your insolvency practitioner is responsible for administering and distributing your payments.
  • The terms of an IVA will usually enable you or your spouse or partner or a relative to make arrangements to buy your share of the net worth of your home or to make extra payments, rather than the home having to be sold. This may be done through a remortgage or a loan. (Net worth means its value after any debts secured on it have been paid.)
  • On completion of the IVA, the balance of what you owe your creditors is written off.
  • You may be able to continue running any business you have.

Disadvantages of an IVA

  • Your IVA is entered on a public register.
  • If there is some equity (value) in your home after taking account of the mortgage(s) on it, you will probably have to pay for your share, usually in the fifth year of your IVA, by remortgaging the property.
  • If you can’t get a remortgage, you may have to continue making monthly or quarterly payments from your income, for up to another year.
  • If your circumstances change, and your practitioner can’t get creditors to accept amended terms, the IVA is likely to fail. You will then still owe your creditors the full amount of what you owed them at the start, less whatever has been paid to them under your IVA.
  • If your IVA fails, you may be made bankrupt.

Qualifying for an IVA

In order to qualify for an IVA you will usually need*:

  • At least 3 different debts to 2 or more creditors;
  • At least £75 per month available income after paying your priority commitments and essential expenditure;
  • At least £5,000 of debts – if you owe less another solution will usually be more suitable

*Other circumstances can sometimes be considered for an IVA.

The Debt Counsellors IVA

If an IVA is the most appropriate solution for you, we can refer you to ClearDebt, which is our preferred IVA supplier. For more information about ClearDebt see

Please note that The Debt Counsellors receives a donation of £1000 from ClearDebt for each IVA we refer to them that is agreed at your IVA Meeting of Creditors. This donation is to pay us for the work we have already carried out on your case. Please be assured, The Debt Counsellors will only suggest an IVA where we believe it is the most appropriate solution to your debt problems.

If you wish to use another IVA provider, we will be happy to help you find an alternative IVA provider and delighted to liaise with them if you agree that we can do this. If you need an IVA and need face to face advice and support we will refer you to our preferred partner,

IVA Fees

The fees ClearDebt and Aperture charge for initiating and supervising your IVA are included in the agreed amount you pay each month into your arrangement.

There are no additional or hidden IVA costs.

There are two sets of fees which are charged for an IVA: The Nominee’s fee and the Supervisor’s fee. No other fees are charged.

The Nominee's Fee

The Nominee’s fee covers the time and expertise needed to consult with you and establish your income and expenditure, assets and liabilities in order to put together the IVA Proposal which is submitted to your creditors.

Nominee represents you from the beginning of your instructions to help you put a proposal to your creditors until the creditor’s meeting and, if the proposal is accepted, your Nominee becomes your Supervisor thereafter.

The Nominee’s fee can typically vary from £1,000 to £2,220 depending on your creditors agreement.

On IVA cases where your repayments are higher because of the amount you can afford to repay, the nominee fee will be drawn over the first year of the arrangement (usually within the first five months).

If you can only afford to make lower repayments, the nominee fee will be paid over a longer period.

If you are a sole trader, partner in a business or have complicated affairs, the Nominees fees may occasionally be higher – but ClearDebt will explain the reasons for this if they are higher than as previously stated.

Supervisor's Fee

In addition to the above, following approval of the IVA, a monthly Supervisor’s fee will be taken.

The Supervisor’s fee covers the specialist work carried out throughout the duration of your IVA (normally a five year period) to ensure it is managed correctly and ethically.

You will have appointed a ClearDebt or Aperture Personal Supervisory Advisor who will manage the day to day running of your account who is qualified to help you should any changes to your circumstances affect your ability to pay your monthly IVA contribution.

Furthermore, your Supervisor will conduct annual reviews throughout your IVA term to ensure payments are still affordable and to address any variations that may be needed.

The Supervisor fees are never more than a maximum of 15% of all the contributions you make over the period of the IVA, taken monthly, in fulfillment of the supervisory role.

The Costs of IVA Advice

ClearDebt and Aperture don’t make any charge to you for any debt advice given prior to the IVA being prepared, however if a Meeting of your Creditors has been arranged and you decide not to proceed, ClearDebt reserves the right to charge you £250 to recover costs and disbursements that we have incurred. There are never any other charges whatsoever.

If, in the unlikely event your proposal is refused by creditors, ClearDebt and Aperture do not make any charge to you. You will be referred back to The Debt Counsellors and we will look at alternative debt solutions for you.

IVA Fee Example

In a IVA of 5 years, a person with a monthly disposable income of £70 will pay:

Nominee fee: This is subject to a minimum fee of £1,000, therefore 14 months of £70 per month

Supervisory fee: 46 months at 15% of £70 per month. This equates to £10.50 a month supervisory fee, totalling £483 in total supervisory fees.

The total fees paid to Cleardebt or Aperture will therefore be £1,483.

The Insolvency Service IVA Protocol:

There is a voluntary code of practice, called the IVA Protocol, which all insolvency practitioners and most creditors have signed up to.

The aim of the protocol is to make sure the processes involved in an individual voluntary arrangement (IVA) are clear and fair and provides a standard format for all straightforward consumer IVAs. The protocol sets out a standard approach to:

  • the content of the proposal
  • the way income and expenditure is assessed
  • how equity in the home is dealt with
  • terms and conditions included in the IVA.

Read more about the IVA Protocol on the Insolvency Direct government website.

Public Register

Records of IVAs are kept on a public register called the Individual Insolvency Register.

You can search this for free at Alternatively, you can search the register by visiting your local official receiver’s office.

You can find out the location of your nearest official receiver’s office by checking your local phone book or by calling the Insolvency Service on 0845 602 9848.

Your IVA will remain on the register until it is completed or terminated.

Mounting debts? Need help?

Get FREE debt advice
I Need Debt Help
Shareable URL: