# What is an Individual Voluntary Arrangement (IVA)?

> Quick answer · Last updated 23 June 2026

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## In short

An IVA is a formal, legally binding agreement to pay back part of your unsecured debt over a set period — usually five to six years — with the rest written off if you complete the plan. It must be set up by an insolvency practitioner and is an alternative to bankruptcy for people with regular income and manageable debt levels.

An Individual Voluntary Arrangement is a formal insolvency procedure in England, Wales and Northern Ireland (Scotland uses a Protected Trust Deed instead). You agree with creditors, through an insolvency practitioner, to pay affordable monthly contributions or a lump sum. Creditors representing at least 75% of the value of voting debts must approve the proposal.

Once approved, all included creditors are bound by the arrangement — they cannot add further interest in most cases or take separate enforcement action while you comply. At the end of the IVA, remaining included debt is written off. Typical duration is five years, or six if you need to release equity from your home.

An IVA has significant consequences. It is recorded on the Individual Insolvency Register and stays on your credit file for six years from the start date. You may need to remortgage or extend the IVA to release home equity in the final year. There are restrictions on borrowing and you must declare any windfalls above a threshold to the supervisor.

Fees are paid from the contributions, but setup and ongoing supervisor costs reduce what creditors receive — which is why some creditors may reject a proposal. Always take advice from a free, FCA-authorised debt adviser before committing. An IVA suits some people with steady income and substantial unsecured debt; it is not right for everyone.

## Related

- [What is a debt management plan?](https://moneyguide.org.uk/answers/what-is-a-debt-management-plan/)
- [What is bankruptcy in the UK?](https://moneyguide.org.uk/answers/what-is-bankruptcy-uk/)
- [Credit cards & loans guide](https://moneyguide.org.uk/credit/)

## Primary source

gov.uk/options-for-paying-off-your-debts

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.