What is an IVA?

Tuesday, 15 March 2022

In the upcoming series of articles we intend to explore each of the possible solutions for dealing with personal debt and how to ensure you choose the correct solution for you.

The first solution we will consider is an Individual Voluntary Arrangement (IVA).

What is an IVA?

An IVA is a legally binding agreement between you and your unsecured creditors to repay your debts back at an affordable rate within a set timeframe.  For an IVA to be approved, 75% of creditors voting upon it must vote to accept the terms of the proposal.  If the requisite majority votes to accept, then all unsecured creditors are bound under the Arrangement, even those who may not have voted and those who voted against.

An IVA can be tailored to suit your individual circumstances.  It can be funded via monthly contributions or from a third party lump sum and can last anywhere from one to five years, dependent on your individual circumstances and the attitude of your creditors.  Any remaining debt is written off at the end of the agreed term.

Is an IVA right for you?

When you speak to a ClearSlate advisor we will determine whether an IVA is the best route for you to explore based on your circumstances.  Every IVA is tailored to the individual.  The key advantages to entering into an IVA include:

  • An affordable repayment;
  • Protection of assets;
  • Debts and interest are frozen;
  • No upfront fees;
  • An IVA will provide an intermediary between you and your creditors and will stop any unwanted phone calls or threatening letters;
  • All creditors are legally bound by the arrangement.


As with any formal debt solution there will ultimately be some adverse affects also.  The main ones being:

  • An IVA deals with unsecured debt only, meaning secured debt such as mortgages or HP agreements are not included;
  • An IVA will adversely affect your credit score;
  • An IVA is advertised in the Stubbs Gazette and kept on an online register until completed;
  • If you are a homeowner, you may need to release equity from your home


If you are currently facing financial difficulties, contact one of our advisors, who will discuss your situation and advise on what the best solution is for you. 

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