What are the pros and cons of entering an IVA?

You might be considering an IVA (Individual Voluntary Arrangement) if you can't meet your payments towards your unsecured debts each month - and you can't see yourself being able to repay these debts in full in a reasonable amount of time.


There are a number of advantages for those who are accepted onto an IVA. For example:

  • It will reduce your debt repayments each month to a more affordable level. All of your essential costs will be taken into account, and your monthly IVA payment will be tailored to fit around those costs.
  • Interest and charges on the debts included in your IVA will be frozen.
  • Your unsecured lenders won't be able to take any further legal action against you. So, for example, they won't be able to take you to court, petition for your bankruptcy or ask for higher payments - as long as you stick to your payments as agreed.
  • Some of the disadvantages of bankruptcy will be avoided. It's very unlikely that you'll have to sell your home because of an IVA, for example - whereas you may have to during bankruptcy.
  • After five years, if your IVA has gone to plan, any remaining unsecured debt will be written off.
  • You will benefit from the advice and guidance of a qualified Insolvency Practitioner.

Click here to see if you could qualify for an IVA.


An IVA is a legally binding, serious debt solution - and there are some disadvantages, such as:

  • Your credit rating will be damaged for six years from the date your IVA starts. This will make it more expensive and/or more difficult to get further credit in this timeframe. Bear in mind, however, that your credit rating would have been damaged if you'd continued struggling with your debts without getting any professional help.
  • Though you won't be asked to sell your home, you might be asked to release some equity during the final year of your IVA.
  • Your IVA won't go ahead automatically - enough of your lenders would have to agree to it before it could start.
  • By Matthew Plant.

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Subject to eligibility and acceptance. Fees Payable. Debt write off applies to unsecured debts only and on completion of an IVA, alternative solutions may be offered. If your IVA fails, it could lead to Bankruptcy. Your ability to obtain credit will be affected for at least 6 years. Homeowners may be required to release the equity in their property.