Individual Voluntary Arrangements (IVA)

An IVA may be appropriate if your financial situation is difficult but recoverable with the right structure and protection. It is often a suitable option if you:

• Have unsecured debts you are struggling to manage, such as credit cards, loans, overdrafts, or business-related liabilities
• Can afford a realistic monthly contribution, or have access to a one-off lump sum to offer creditors
• Want to avoid bankruptcy, especially if you own property, work in a regulated profession, or simply want to retain more control over the process
• Are a sole trader who needs to continue trading, but whose historic debts are preventing the business from moving forward
• Need a structured, legally binding framework that freezes interest, stops creditor action, and gives you one affordable payment each month
• Prefer a solution that offers flexibility, allowing payments to be adjusted if circumstances change
• Want a clear route to becoming debt-free, with remaining qualifying debts written off at completion

An IVA is not right for everyone and we will always be honest about whether it is suitable for you. If it is not a suitable course of action, we will clearly explain the alternative options available to you and help you understand the best way forward.

1. Initial advice and assessment

We begin with a confidential review of your financial situation, which will cover your income, expenditure, debts, assets, and (if applicable) business performance. If an IVA is suitable, we will explain:

• What it would mean for you
• How the payments are calculated
• What creditors expect
• Realistic outcomes based on your circumstances

2. Preparing your IVA proposal

If you choose to proceed, we will act as your ‘Nominee’, working with you to prepare a tailored IVA proposal that is fair to creditors but also achievable for you.

This includes:

• A realistic and fully assessed budget covering all essential household expenditure and cost-of-living needs, with flexibility for seasonal income changes, business fluctuations and irregular personal expenses.
• A detailed schedule of all unsecured debts, including creditor balances, interest positions, arrears, and any recent enforcement activity — this will ensure the proposal reflects an accurate and transparent position.
• A comprehensive review of income and assets, identifying what is protected, what may need to be disclosed, and any assets that creditors may expect to be considered within the proposal.
• For sole traders, a robust 12-month business cashflow forecast and projected trading income for the full IVA period, assessing viability, seasonality, essential trading costs, and creditor dependencies.
• Clear justification for any irregular or essential expenditure, such as school holiday costs, tools/equipment, vehicle expenses, professional fees, or other items necessary for day-to-day living or business continuity.

3. Submission to creditors

Your IVA proposal is issued to all unsecured creditors, who will vote on whether to approve it. An IVA will be approved if the following statutory thresholds are met:

• 75% or more by value of voting creditors support the proposal (based on debt value)
• More than 50% of voting creditors who are not ‘associates’ of the debtor also approve it (the ‘unconnected creditor’ vote)

Once approved, the IVA becomes legally binding on all unsecured creditors including those who voted against it or did not vote at all.

Creditors may also submit modifications (changes they request before agreeing). When this happens, we will:

• Explain each modification to you in plain English
• Advise on the implications
• Discuss how they may affect your budget, obligations, or trading position (if applicable)
• Support you in deciding whether to accept or reject them
• Manage communication with creditors throughout the process

Our role is to ensure you have the clarity and confidence to make informed decisions  and ultimately help you secure an IVA that is both fair to creditors and realistic for you.

4. Supervising the arrangement

Once your IVA is approved, we act as your ‘Supervisor’, ensuring the arrangement runs smoothly and in accordance with the terms agreed by creditors.

Our responsibilities include:

• Conducting annual reviews of your income, expenditure and overall financial circumstances
• Monitoring payments and distributions to creditors, ensuring funds are allocated correctly and transparently
• Assessing and implementing contribution adjustments, where permitted, if your circumstances change
• Communicating with creditors on your behalf, handling queries, updates, and statutory reporting
• Supporting you in keeping the IVA on track, offering guidance if challenges arise

You will also have certain duties throughout the IVA, such as:

• Keeping to the agreed payment schedule
• Providing up-to-date financial information during annual reviews
• Notifying us promptly of any change in income, employment, household circumstances, or business position
• Adhering to all terms set out in the IVA proposal

It is important to be aware that breaches of the terms,  such as missed payments or failure to provide required information, may lead to the IVA failing. In serious cases, this could result in the Supervisor being required to petition for your bankruptcy, depending on the proposal terms.

Our priority is always to work with you proactively to avoid issues and help ensure the arrangement succeeds.

5. Completion

When you have met all the obligations set out in your IVA,  whether through monthly contributions, a lump-sum settlement, or a combination of both,  we will complete the final checks required as Supervisor.

These include:

• confirming all payments have been received
• ensuring all terms of the IVA have been complied with
• issuing a Completion Certificate, formally bringing the IVA to an end
• notifying creditors and updating the Insolvency Service
• arranging for your IVA record to be removed from the Insolvency Register (normally within three months of completion)

Once complete, any remaining qualifying unsecured debts are written off, giving you a clean financial start.

Completion means:

• You are released from the debts included in the IVA
• Ongoing creditors contact stops
• You can begin rebuilding your financial position

Our business recovery and restructuring team will guide you through each step of the process and explain what to expect as you transition out of the IVA.

• Halts most creditor action
• Interest and charges frozen
• Consolidates debt into one affordable monthly payment
• Opportunity to continue trading (for sole traders)
• Flexible if circumstances change
• Debt written off at completion
• Not publicly advertised (unlike bankruptcy)

It is important to understand what an IVA involves before you commit :

• Your credit rating will be affected for six years
• Some assets may need to be included
• Increased income during the IVA may increase payments
• You must keep to the agreed budgets
• Equity release provisions may apply if you own a home
• The IVA will appear on the Insolvency Register

Our specialist team will explain everything clearly before you enter into any official agreement.

Monthly contribution IVAs

Most IVAs involve monthly payments, typically for a five year period. Payments are based on what you can genuinely afford rather than creditor demands.

Our goal is to ensure your budget is realistic and sustainable. Some of the strategies we use to achieve this include:

• Adjusting seasonal income for sole traders
• Allowing for increased costs during winter or holidays
• Reducing payments in months where expenses are higher (e.g. December for parents)

A well-structured IVA should not set you up to fail. Our focus is to create an arrangement you can maintain comfortably.

Lump-sum IVAs (full and final IVAs)

A lump-sum IVA may be suitable if you:

• Have access to a one-off sum (e.g. from family, asset sale, or pension lump sum)
• Cannot sustain monthly payments
• Have limited long-term earning potential
• Need a quicker resolution to your financial situation

Creditors may accept a lump-sum IVA if it provides a better return than other options, such as bankruptcy.

Consumer IVAs (non-business individuals)

For individuals with personal debts (e.g. credit cards, loans, overdrafts), a consumer IVA provides:

• One affordable monthly payment
• Protection from court action
• An end to any creditor contact
• A structured, predictable route to becoming debt-free

We will tailor an IVA proposal to your household needs, ensuring you have room in your budget for essentials and occasional irregular expenses.

Sole traders can enter IVAs, but the approach must reflect the realities of your business.

Our business recovery and restructuring experts can build you a sustainable IVA that also addresses the following key factors:

1. Cashflow volatility

Trading income often fluctuates. We factor seasonality into your IVA budget so your payments remain workable.

2. Business viability

Within your IVA, we will need to provide:

• A 12-month detailed business cashflow forecast
• Your projected income for the duration of the IVA
• Evidence of upcoming contracts or trading patterns (if applicable)

3. Trading during an IVA

A sole trader can continue to trade during an IVA, provided certain conditions are met:

• You must maintain business records
• Certain trade credit may be restricted
• Some suppliers may adjust terms

We can help you communicate with creditors throughout your IVA to minimise any disruption to your business operations.

4. Asset considerations

Essential business assets (tools, equipment, vehicles) are usually retained. Non-essential assets may need to be valued or included in the proposal.