An IVA is a commitment of five or six years. This timeline explains each stage, from your first adviser meeting to the certificate of completion, and what to have ready along the way.
Need to know
- An IVA is a legally binding agreement with creditors, available in England and Wales, usually proposed for 60 or 72 months and set up only by a licensed Insolvency Practitioner.
- Setting up an IVA typically takes four to six weeks, and approval needs 75% of votes by value of debt at the creditors’ meeting.
- The Insolvency Practitioner’s fee comes out of your monthly payments, not upfront, and early payments usually go more towards the fee than the debts.
- Your finances are reviewed every year and payments can go up or down; missed payments can lead to cancellation, and the Insolvency Practitioner can make you bankrupt.
- On completion you receive a certificate and the included debts are written off; the IVA stays on your credit file for six years from the start date.
An individual voluntary arrangement (IVA) is a formal, legally binding agreement with the people you owe, and it commits you to five or six years of payments. That makes it worth understanding the whole journey before you agree to anything. This timeline maps the process in order, from your first debt advice session to the day you are discharged, with notes on what to have ready at each stage.
What an IVA Is and What Debts It Covers
An IVA is an arrangement you make with your creditors, meaning everyone you owe, to repay all or part of the debts. It is designed for people who are insolvent, meaning unable to pay what they owe. IVAs are available in England and Wales; if you live in Scotland, a Protected Trust Deed is the comparable arrangement.
Most IVAs are proposed for 60 or 72 months. Once approved, the arrangement binds every creditor it covers, including any who voted against it. If a debt is joint with someone else, creditors can still pursue that other person for the full amount, so they may need their own advice.
If your debt problems are mainly with short-term loans, it is worth reading our guide on struggling to repay a payday loan first, because less formal options may exist.
Months 0 to 1: Free Advice and Eligibility
Everything starts with advice, not with an application. Speak to a free, regulated debt adviser before committing. The adviser should examine your income, spending, assets and debts in detail, and explain every option, including whether a debt relief order might suit you better than an IVA.
You may be able to get an IVA if you are over 18, have a monthly disposable income, and owe more than the value of your assets. One is unlikely to be suitable if your debts are very low, your income is solely made up of benefits, or you can only afford a small monthly payment; the protocol asks that other options be considered for debts below £5,000. If what you mainly need is a pause from creditor action rather than a long-term solution, our Breathing Space timeline explains how that temporary protection works instead.
Have ready at this stage: a list of all your debts with creditor details, your income and regular spending, and recent payslips or bank statements.
Weeks 2 to 6: The Proposal and the Creditors’ Vote
If the adviser thinks an IVA is right, you choose a licensed Insolvency Practitioner (IP), the only professional who can set one up. The IP drafts your proposal: who you owe, how the debt arose, what you can afford each month, how much creditors will receive, and what the IP will be paid for managing the arrangement. You are the person agreeing to it, so read it carefully and take the time you need.
Setting this up typically takes four to six weeks, though it can vary. The proposal goes to your creditors with a meeting date at least 14 days later, and they can ask for up to a further 14 days. At the meeting, approval needs 75% of votes by value of debt. Creditors may propose modifications, which are changes to the terms; your IP will tell you whether they can be included, and you should ask what each change means before accepting. Once approved, the IVA starts and the creditors it covers must stop asking you for payment.
Months 1 to 12: Payments, Fees and the First Review
You make one regular payment to your IP, who divides the money between your creditors. The IP’s fee comes out of these monthly payments rather than as an upfront charge, and in the early months a larger share of what you pay typically goes towards the fee than towards what you owe, so ask for the breakdown before you sign.
Once a year, your IP looks again at what you earn and what you spend. If your circumstances have changed, your payment may increase or decrease. You must cooperate with the review, because your IVA can be cancelled if you do not. If something changes between reviews, tell your IP early rather than waiting.
Your IVA is also added to the Individual Insolvency Register, a public record, and it will appear on your credit file for six years from the date it starts, which can make getting credit harder while it runs.
Later Years: Your Home, Windfalls and Failure
A protocol IVA for a homeowner is usually proposed for 72 months rather than 60 where you have a beneficial interest in the property of £10,000 or more, worked out as 85% of its value minus secured borrowing such as a mortgage. You will not need to sell your home or use any equity in it to pay for the IVA, but read the property terms carefully and ask your IP how a windfall such as an inheritance would be treated before you agree.
The arrangement fails if you cannot keep it up. Your IP can cancel the IVA if you do not keep up repayments, and can make you bankrupt.
Important
Missing payments can end the IVA and leave you owing the original debts, and your Insolvency Practitioner can make you bankrupt. If a month looks difficult, contact them before the payment falls due.
Month 60 or 72: Completion, Discharge and Afterwards
Once you have made all the agreed payments, you receive a certificate of completion and the debts the arrangement covered are cleared. Your entry on the Individual Insolvency Register is removed three months after the arrangement ends. The credit file record lasts six years from the start date, so for a full-length IVA it drops off around the time you finish; it is sensible to check your file afterwards and confirm the entry has gone.
The concrete next step is a free conversation with a regulated debt adviser, who can tell you whether an IVA or another solution fits your circumstances before you commit to anything.
Your questions answered
Q: How long does it take to set up an IVA?
A: Typically four to six weeks from first contact to approval, depending on how quickly you supply documents and how quickly creditors respond. Creditors must be given at least 14 days to vote, which can be extended by up to a further 14 days.
Q: What happens at the creditors’ meeting?
A: Your creditors vote on your proposal, and 75% of votes by value of debt must be in favour for it to be approved. They can also request modifications, which are changes to the terms, and your Insolvency Practitioner will tell you whether they can be included.
Q: Does an IVA cover a debt I share with someone else?
A: Your IVA covers what you owe, but creditors can still pursue the other person for the full joint debt. They may want to get free debt advice too.
Q: What happens when the IVA ends?
A: You receive a certificate of completion and the debts it covered are written off. Your entry on the Individual Insolvency Register is removed three months after the IVA ends.
This guide is general information, not financial advice. Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk. We don’t arrange loans or work with lenders. Before borrowing, check the lender is authorised on the FCA register, and consider free debt advice from MoneyHelper, StepChange, National Debtline or Citizens Advice.