An Individual Voluntary Arrangement (IVA) could be an option if you owe money you genuinely can't afford to repay in full, but you still have a little left over each month once your essential bills are covered. In simple terms, you usually qualify if you have a meaningful amount of unsecured debt, more than one creditor, and a modest, affordable sum you can commit each month.
There's no single, fixed rule that decides eligibility. Instead, an insolvency practitioner looks at the whole picture: what you owe, who you owe it to, and what you can realistically afford after living costs. The guidance below explains the factors that matter most, but the only way to know for certain is to have your situation reviewed.
The short answer
- You'll usually need around £7,000 or more of unsecured debt as a general guide.
- Most people entering an IVA owe money to two or more creditors.
- You typically need roughly £100 a month or more of spare income to offer.
- An IVA usually lasts five to six years and will affect your credit rating.
- These are broad pointers, not guarantees — everyone's circumstances are assessed individually.
The usual qualifying criteria
While every case is judged on its own merits, most people who go on to start an IVA share a few things in common.
Enough unsecured debt
An IVA is generally suited to larger debt problems. As a rough guide, people often need around £7,000 or more of unsecured debt, such as credit cards, personal loans, overdrafts and catalogue accounts. If you owe less than that, a different route like a debt management plan or debt relief order may be more appropriate.
More than one creditor
An IVA is a formal agreement with the people you owe, so you'll normally need at least two separate creditors. This is because creditors vote on the proposal, and the arrangement works by spreading one affordable payment fairly between them.
Affordable spare income
This is often the deciding factor. After your rent or mortgage, utilities, food and other essentials, you'll need something left over to offer your creditors each month. Many arrangements are built around a monthly payment of roughly £100 or more, although the exact figure depends entirely on your income and expenditure. You can read more about how this works in our guide to IVA monthly payments.
What else is taken into account?
Beyond the headline figures, an insolvency practitioner will look at your wider circumstances:
- Your home. Owning a property doesn't rule you out — an IVA is often used specifically to help people keep their home. See our guide for homeowners considering an IVA.
- Your income source. You can still be considered if you're employed, self-employed, or in some cases living mainly on benefits, provided there's affordable surplus income.
- The type of debt. Most unsecured debts can be included, but some — such as court fines and certain arrears — usually can't.
- Your situation being settled. A stable, sustainable income makes an IVA more likely to succeed over its full term.
Who might an IVA not suit?
An IVA isn't the right answer for everyone. If you have very little spare income each month, a debt relief order might be a better fit. If your debts are relatively small, you may be able to deal with them yourself. And in some situations, bankruptcy could be more appropriate — our guide on whether an IVA is better than bankruptcy explains the trade-offs.
Do creditors have to agree?
Meeting the general thresholds is only part of the story. Because an IVA is a formal deal, your creditors get to vote on it. For the arrangement to be approved, creditors representing at least 75% by value of those who vote need to accept the proposal. In practice, many proposals are approved because a well-prepared IVA usually offers creditors a better return than the alternatives. Your insolvency practitioner will shape a realistic proposal designed to give it the best chance of success, and will explain what happens at each stage.
How to check whether you qualify
The most reliable way to find out is a free, confidential review of your income, spending and debts. From there, an adviser can tell you whether an IVA looks realistic, or whether another solution would serve you better. If it does look suitable, our guide on how to apply for an IVA walks you through the steps that follow. Remember, too, that an IVA is a serious commitment lasting several years and will affect your credit rating throughout, so it's worth taking the time to weigh it up properly. You can also find free, impartial money guidance at MoneyHelper.
How IVA Advice Online can help
We'll take the time to understand your full situation before suggesting anything. If an IVA could work for you, we'll explain exactly what it would mean; if it wouldn't, we'll point you towards a better option. To see where you stand, get in touch for free, no-obligation advice.