Individual Voluntary Arrangement. What is it?

Individual voluntary arrangement (IVA)

An individual voluntary arrangement (IVA) is a formal agreement between you and your creditors that can help you repay your debts at an affordable amount.

IVAs are legally binding agreements that can help you deal with your debts. You can only get an IVA with the help of an insolvency practitioner (IP).

With an IVA you put forward an offer of payments on your debts to your creditors. This will be based on what you can afford. If you have an IVA, your payments towards your debts can be made through either a one-off payment, known as a lump sum IVA, or a 60 or 72 month repayment plan.

IVAs are not available if you live in Scotland. In Scotland, a similar solution is a protected trust deed, however it’s important to note that it has different benefits, risks and fees associated with it.

How do I get approved for an IVA?

To be approved, 75% of your creditors must agree to your proposal via a vote. Once it’s approved, you’re protected against legal action to recover the debts included.

How does an IVA work?

Under an IVA you make 60 or 72 affordable monthly payments towards your total debt, or you offer a lump sum settlement.

In the IVA your finances are reviewed on an annual basis, and you and your creditors will receive a progress report. You’re also notified once the IVA is complete.

Is an Individual Voluntary Arrangement right for you?

How can I apply for an IVA?

Before you consider applying for an IVA, take two minutes to answer a few simple questions, so we can understand the best way to help you.

We will be in touch to arrange to speak to one of our expert advisors.

How do I get an IVA?

An IVA is a debt solution that helps you pay back some of your debt through a legally binding agreement with your creditors.

If an IVA is suitable for you, it’s important to know how to get one and what kind of process is involved.


If you’re thinking about an IVA as a debt solution, it’s important to get expert advice first to make sure it’s suitable for you. There are benefits and risks involved with an IVA and it’s important to know about these before deciding whether to enter into one.

In this section you can find out about how to get an IVA, the fees and costs involved and who can manage one for you.


 IVA costs, fees and charges

Under an individual voluntary arrangement (IVA), you make payments towards your debts based on what you can afford to pay. However, there are other costs involved with setting up an IVA.

No matter who arranges your IVA for you, there are costs and fees involved. However these vary between different IVA companies.

If an IVA is right for you, we can help you set up your arrangement through our partners. We won’t charge you for the advice and support we provide before your IVA is set up but we will receive a referral fee from your insolvency practice.

What are IVA costs and fees?

Our partners fees follow the industry standard for IVAs and are agreed by your creditors. You must agree to the basis of the fees before your IVA is approved. Your insolvency practitioner will deduct these fees from the amount you pay into the IVA, so you don’t have to pay any additional costs.

If you set up an IVA through a different IVA company, it’s likely their fees will vary and when you have to pay the fees might vary too. The fees you pay for your IVA should be part of your agreement, so it’s important to check and understand them before you proceed with an IVA.

There are no upfront fees with our IVAs, and if your IVA isn’t approved, you won’t have any fees to pay.

What do IVA fees cover?

The costs involved in an IVA are:

  • A Nominee fee
  • A Supervisor fee
  • Disbursements

The Nominee fee is the cost for helping you to put the IVA proposal to your creditors. This is subject to approval by your creditors. Depending on who your creditors are and the amount of your monthly contribution, it could be either the first five payments into the IVA, or £2,000.

The Supervisor fee is 15% of any further realisations, to cover the ongoing costs of the IVA. So, if you entered into an IVA you’d pay monthly contributions or money from assets to pay the Nominee fee at first. Then any remaining money you’d pay towards it would go towards the Supervisor fee.

What are IVA disbursements?

There are also other costs known as disbursements. These are expenses that are paid to third parties during your IVA and include insurance to protect any money paid to your IVA, system maintenance fees,and a registration fee to register the IVA with the Insolvency Service.

The cost of any legal advice specific to your case may also be charged as a disbursement. If you own a property there will be expenses to cover the cost of any valuations of your property and land registry fees.

If you were able to pay your creditors in full during the term of the IVA or if your IVA fails, the fees would not be refunded.

Your specific fees will be confirmed when your IVA proposal has been drafted. These are also subject to approval by your creditors.

IVA: Loan and credit card advice

While you have an IVA (individual voluntary arrangement), there are rules over not taking out further credit, such as loans and credit cards.

You’ll need written permission from the insolvency practitioner (IP) supervising the arrangement before you can borrow any further money.

What credit aren’t you allowed to take out on an IVA?

During an IVA you can’t borrow more than £500 from any lender without asking your IP for their permission first. This includes:

  • credit cards
  • overdrafts
  • personal loans
  • payday loans (and other products from commercial lenders)
  • borrowing money from family or friends

Even if you get permission from your IP, you may find it difficult to borrow from many lenders, because your credit file will show the IVA and defaults on your existing debts.

You need to think carefully about an IVA because it can affect different areas of your life, including your job, home and your ability to get credit in the future, however this only stays on your credit file for six years.

If you take out further credit of more than £500 without permission, you’ll be breaching the terms of your IVA.

Can I borrow money from family and friends during my IVA?

It’s against the terms of your IVA to obtain additional credit above £500 without prior consent from your IVA supervisor. This includes borrowing money from family or friends.

By repaying your family and friends first, you’re showing them preferential treatment over and above the creditors in your IVA.

If you’re struggling with your monthly budget or your IVA payments, or you have an emergency cost to meet, it’s important you contact your IVA provider to discuss your options., however we can assist you doing this if done through Milton & Stirling

Could I enter into a salary reduction scheme during my IVA?

Like borrowing money from your family or friends, most salary deduction schemes are treated as a form of additional credit, as you’re effectively borrowing money from your employer. These include cycle to work schemes and season ticket loans.

Depending on the type of salary deduction, your IVA provider may be able to agree to this, but it’ll depend on the amount of the deduction, the reason for it and the impact on your IVA.

For example, a season ticket loan may actually result in you having more money available each month, as it’s cheaper than paying for regular tickets, so your IVA provider may be able to agree to it. However, in every case, your provider would need to see full details of the scheme before making any decision about whether they agree to you entering into it.

If you’re in doubt, talk to your IVA provider. They’ll be happy to clarify anything you’re unsure about and tell you exactly where you stand or just give us a call if we assisted on your IVA, we are always here to help.

IVA companies. Advice on your options

If an IVA is the best debt solution for you, you’ll need an insolvency practitioner (IP) to manage the process for you. An IP may work independently or they may be part of a company which offers IVAs alongside other debt solutions.

An IVA is a form of insolvency. It’s a legally binding arrangement between you and your creditors, where they agree to either 60 or 72 affordable monthly payments or a lump sum settlement. We’d recommend that you get profession debt advice prior to closing the IVA – we can help with that!

If the best solution for your situation is an Individual Voluntary Arrangement (IVA), our carefully selected IVA providers, can support you through the process.

IVAs are not available if you live in Scotland. In Scotland, a protected trust deed is a similar solution but it’s important to note that it has different benefits, risks and fees associated with it.

Is an Individual Voluntary Arrangement (IVA) right for you?

By speaking with us you can find out if an IVA is the best debt solution for your circumstances. If there’s a more suitable solution for you, we’ll recommend it.

An IVA should be considered carefully because of the possible consequences for your personal, professional and financial life for six years. There are several risks and things to consider.

You should be aware that IVAs are only suitable for people with:

  • A regular income, enough to cover all living costs with enough left over to make monthly payments, or
  • A lump sum of money available now or guaranteed in the near future

What does an insolvency practitioner do?

Only an insolvency practitioner (IP) can assist you with an IVA. The IP has several different roles to fulfil during your IVA.

They will firstly act as an advisor to you and help you finalise the terms of your IVA.

Once you decide to proceed with an IVA the IP becomes your Nominee. At this stage they have legal duties to fulfil and need to report to your creditors on the viability of your IVA. The Nominee must remain impartial and can’t be influenced by either you or your creditors.

Once your IVA has been approved, the IP becomes the Supervisor of your IVA. Their role includes reviewing your IVA at least once a year, collecting and passing on your payments and ensuring you stick to the terms of the IVA.

Usually your IP will act as both the Nominee and Supervisor, so you’ll be dealing with the same organisation throughout your IVA.

How do I choose an insolvency practitioner?

Milton & Stirling only works with Insolvency Practices that offer a high quality service that takes the clients journey seriously and ensures an easy on boarding process.

Regardless of who sets up your IVA for you, there will be costs involved. The fees involved with setting up and running an IVA might vary between companies.

IVAs with Milton & Stirling

Our figures show that since 2018, creditors have accepted over 95 per cent of the IVAs we proposed.

Considering an Individual Voluntary Arrangement?

Individual Voluntary Arrangements (IVA) are a specialised area of UK debt advice. If you haven’t already received advice from us, make sure it’s the best solution for you by contacting us. We’ll provide you with a tailored budget and the best solution to help you deal with your debts.

See our Frequently Asked Questions on Individual Voluntary Arrangements