The basicsWhat is an IVA?
An IVA (Individual Voluntary Arrangement) is a formal, legally binding agreement
between you and your unsecured creditors. You agree to repay an affordable, agreed share of what
you owe in fixed monthly instalments — normally over a period of five to six years. Once the
arrangement has been completed successfully, the remaining unpaid balance covered by it is
written off. Throughout the IVA you are protected from further collection
activity and legal action by the creditors included in it.
BenefitsWhy consider an IVA?
For many people an IVA is a way to regain control of their finances without having to declare
bankruptcy. These are the main reasons people choose one:
Advantages of an IVA
- A lower monthly payment — all your unsecured debts are combined into one manageable payment.
- Set up quickly — an IVA can usually be prepared and approved within about a month.
- Collection activity stops — creditors included in the arrangement cannot take legal action or contact you about repayment.
- The remaining debt is written off — whatever you do not repay during the arrangement is written off once it ends (usually after 5–6 years).
Drawbacks and risks
- Impact on your credit score — the entry stays on your credit file for six years from the start date.
- No guarantee — creditors can reject the arrangement you propose.
- Public register — your details are recorded on the public Insolvency Register.
- Risk of the IVA failing — if you stop making payments, creditors can resume collection activity.
EligibilityIs an IVA right for you? Who qualifies
An IVA tends to suit people with a regular income who can afford the agreed monthly payment but
have no realistic way of clearing the full balance within a reasonable time. To qualify for an IVA
you will usually need to meet the following conditions:
- You live in England, Wales or Northern Ireland.
- You have at least £6,000 of unsecured debt that you cannot repay.
- You owe money to at least two separate creditors.
- You can make regular payments towards the agreed monthly instalment.
- You have a regular income that does not come solely from benefits.
Where it appliesWhich parts of the UK is an IVA available in?
An IVA is available only in England, Wales and Northern Ireland.
If you live in Scotland, the equivalent is the
Protected Trust Deed — a Scottish solution of a similar
nature, but governed by separate legislation.
The processHow it works, step by step
We go through the whole process with you — at your pace and with no pressure. Here is how it looks:
- Free consultationYou answer a few questions about your financial situation and we check whether an IVA is the right fit for you.
- Speak to an adviserWe discuss your goals and the realistic options, and work out the monthly payment you can afford.
- Proposal to your creditorsA licensed Insolvency Practitioner prepares the formal IVA proposal.
- Creditors voteAn IVA is approved when creditors representing at least 75% of the debt value that votes agree to it.
- Set-up and repaymentYou make one monthly payment and the practitioner distributes it among your creditors for the length of the arrangement.
After the arrangementWhat happens once the IVA ends?
Once the arrangement has been completed successfully (usually after five to six years of regular
payments), the outstanding unsecured debts covered by it are written off. It is worth
remembering that some obligations — such as court fines, child maintenance or certain student loans —
generally cannot be included in an IVA. Open Finance will guide you through the whole process, from
the first conversation to the closing of the IVA.
SupportYou do not have to face debt on your own
Dealing with debt can feel overwhelming — but the sooner you ask for help, the easier it is to find
a way forward. There are no “magic fixes” for debt — only legal, established routes,
and an IVA is one of them. A free consultation with our adviser comes with no obligation and does not
affect your credit score until you accept the solution proposed to you.
