What is an IVA?

An IVA, or Individual Voluntary Arrangement, is a legal method of resolving debt problems. It allows a person to repay a percentage of their unsecured debt back to their creditors in affordable monthly instalments over a fixed term, usually around 5 years. Once the IVA successfully completes the remaining debt is written off and you’ll be issued with a certificate of completion. At this point any balances outstanding on the debts included in your IVA will be written off.

The IVA can be completed in less than 12 months if there is a lump sum settlement available.

An IVA is statutory contract set up by Aperture between you and your creditors, you can be secure in the knowledge that as long as you make your monthly payments, your creditors cannot contact you or take action against you for your outstanding debt.

Who can apply for an IVA?

Subject to your individual circumstances, you could qualify for an IVA. If you have debts of over £5,000 with 2 or more creditors, have a regular income and a monthly surplus of at least £85 after essential expenditure, an IVA could be the best debt solution for you.

Straightforward Process

First, we will look at your current level of debt, your income and expenditure and your monthly surplus. If we think an IVA is your best option, we will draft an IVA proposal to present to your creditors for the settlement of your current debts.

Creditors will then review your proposal and will usually take a commercial view when deciding whether or not to agree to the IVA.

Considering an IVA?

Before you apply for an IVA, consider both the advantages and disadvantages of this debt solution so you can make an informed decision about your financial future. Our experts will be more than happy to walk you through these.

What are the criteria?

  1. You must have a minimum of £5,000 worth of unsecured debt
  2. You must owe at least two creditors
  3. Have an available monthly surplus income of at least £85
  4. You must be 18+

What are the advantages?

  • Stops further interest and charges
  • The number of monthly repayments are fixed (usually 60 or 72)
  • If approved, all creditors included in your IVA are legally bound by it, awarding you legal protection from further creditor action
  • Supervised by licenced insolvency practitioners
  • No further contact from your unsecured creditors

What are the disadvantages?

  • Need 75% or more of voting creditors to approve
  • Credit rating can be affected; the IVA will stay on your file for 6 years after approval
  • You may be required to release equity from your property
  • Your IVA will be listed on the Individual Insolvency Register
  • If your IVA fails, creditors can request the Supervisor to petition for bankruptcy
  • Creditors can vote to reject your arrangement – however, even if this happens – we will work with your creditors to try to find a resolution that will allow your IVA to become approved
  • Debts that can be included in a IVA

    There are some debts that cannot be included in your IVA and will still require repayments throughout and after your plan is completed.

    Debts included in an IVA

    Debts excluded from an IVA

    Catalogue Debt

    Mortgages and secured loans

    Personal loans

    Hire purchase agreements


    Court fines

    Credit cards

    TV Licence arrears

    Gas and electric arrears

    Student loans

    Council tax arrears

    Child support arrears

    Water arrears

    Social fund loan

    Payday loans

    Rent arrears if you are still living in the property

    Store cards

    Tax credit or benefit overpayments that have not been determined prior to the IVA

    Income tax and national insurance arrears

    Tax credit or benefit overpayments that have been determined prior to the IVA

    Debts to family and friends

    Hire purchase and mortgage shortfalls after sale of the asset

    Rent arrears where you have left the property

  • Points to consider

    Under the terms of your IVA, if you are a homeowner and have equity in your property, you may be required to re-mortgage six months before the end of the arrangement and pay the money released from the re-mortgage into your IVA.

    If you have equity of less than £5,000 you would not be required to re-mortgage.

    Re-mortgaging to release equity to pay into your IVA is not restricted in the same way as taking out a new mortgage would be. However, it may still be difficult to find a mortgage company who will lend to you while you’re in an IVA.

    If you can’t re-mortgage, or if it would be too expensive to do this, you may need to make extra monthly payments into your IVA, increasing the term by 12 months. You can also get a third party to provide money for this.

    At the start of an IVA an assessment of your income and expenditure items is taken and thereafter reviewed annually. You will need to restrict your spending that it remains within guidelinesagreed by creditors.

    Acceptance of the IVA lies with the creditors. For an IVA to be accepted, 75% of the voting creditors by debt value must approve, therefore any single creditor with 25% or more of the overall debt level must not reject.

    There may be other suitable options for dealing with your debts and where this is the case we will make you aware of them. If an IVA is not an appropriate solution for you we will signpost you to the Money Advice Service for advice.

    An annual financial review of your income and expenditure will take place on each anniversary of the approval of your IVA until completion. This will determine whether you can afford to increase your monthly contributions. Increases in your living expenses and changes in circumstances are taken into account during this review. There are restrictions on the expenditure of a person who enters into an IVA.

    There will be no upfront fees charged. The Nominee’s fees and Supervisor’s fees are paid from your agreed monthly contribution. If you become able to repay your debts in full the amount you would pay would include these fees.