Applying for an Individual Voluntary Arrangement (IVA)

Older woman stood facing forward with her hand on her hip and smiling broadly.
All you need to know about applying for an IVA. 

An IVA is an agreement with your creditors to pay your disposable income (the money left each month after you’ve paid bills and other household needs) towards your debts for a period of five to six years. After this time, the remainder of your debts will be written off. 

Please note

This option is only available to those living in England, Northern Ireland and Wales.

Can I apply for an IVA?

To set up an IVA you either need enough reliable disposable income to pay into your IVA each month, or you need a lump sum (in which case you’ll apply for an LSIVA). Ultimately, it’s down to your creditors to accept the IVA proposal.

How do I apply for an IVA?

1. Assessing your case

We will take a look at your individual circumstances and financial situation to determine if an IVA could be right for you.

2. Checking with an IVA provider

If an IVA is right for you, CAP will check with a trusted IVA provider to see if they think an IVA proposal would be accepted by your creditors. This will be dependent on your personal circumstances, assets, disposable income (money left over after paying bills and other household necessities) and who you owe money to.

3. Referral to an IVA provider

If the provider agrees it’s likely you’d be accepted, then we’ll refer you to this IVA provider, who will then set up and run your IVA. Your CAP Plan will be closed at this stage, and the IVA provider will take you through the process to becoming debt free.

4. Negotiation with your creditors

The IVA provider will negotiate the terms of your IVA with your creditors. If 75% of your creditors agree, the IVA will be set up.

Once the IVA is set up, your creditors are legally bound by it. Interest and charges on your debts should be stopped and they can no longer chase you for your debt.

5. Maintaining your IVA

You’ll need to work with your IVA provider to maintain your IVA.

If you find you can no longer afford your monthly IVA payments, then it is important that you let your IVA provider know. Your IVA provider may be able to renegotiate your payments, or arrange a payment holiday. 

If your financial situation changes for the better, then you should also let your IVA provider know. They should review your circumstances each year, and if you don’t let them know about increases in income or lump sums received, you may have broken your IVA agreement. It is likely that you would have to increase your payments and that lump sums may need to be paid into the IVA.

If you realise that you have missed a debt from your IVA, then let the IVA provider know and they will advise you on what to do.

6. Completing your IVA

When you reach the end of your agreed IVA, then your IVA is marked as complete. This means you’ll be debt free.


An IVA usually lasts for at least five years. An LSIVA is much quicker and should be resolved as soon as the lump sum is divided amongst the creditors.

An LSIVA is Lump Sum Individual Voluntary Arrangement. With an LSIVA, instead of making monthly payments to your debts, you pay one single lump sum.

If you have both a lump sum and significant disposable income, it’s unlikely that your LSIVA application would be accepted.

During your IVA, your name will be on the Insolvency Register. IVAs are listed in the public domain and will also appear on your credit report for six years. This could make it more difficult to take out credit.

IVAs can also affect some jobs. If you’re an accountant, solicitor or in a position of financial responsibility, you must check if an IVA would affect your employment.

During the IVA you are not allowed to be the trustee of a charity.

Go back to other potential routes out of debt