IVAs explained: the £100/month debt solution (pros and cons)

An IVA (Individual Voluntary Arrangement) is a formal agreement between you and your creditors to pay off part of your debt over a fixed period — usually 5 to 6 years.

How does an IVA work?

You make one affordable monthly payment to an **Insolvency Practitioner** (IP), who distributes it among your creditors. At the end of the IVA, any remaining qualifying debt is **written off**.

Who qualifies?

There's no strict minimum, but IVAs typically work best if:

What debts does an IVA cover?

**Included:**

**Not included:**

The pros

The cons

IVA vs DRO vs Bankruptcy

| Factor | IVA | DRO | Bankruptcy |

|--------|-----|-----|-----------|

| Duration | 5–6 years | 12 months | 12 months (restrictions) |

| Debt limit | No maximum | £30,000 | No maximum |

| Monthly payment | £100+ | £0 (must be £75 or less disposable) | Varies |

| Keep your home? | Usually yes | Must have no assets | Likely sold |

| Cost | Fees from payments | £90 | £680 |

How to get an IVA

You need to go through a **licensed Insolvency Practitioner**. Free advice is available from:

**Important:** Be cautious of IVA companies that cold-call or advertise heavily. Many charge high fees. Always get free advice first from StepChange or Citizens Advice.