Everything You Need To Know About An IVA

What Is An IVA?

An IVA (individual voluntary arrangement) is a formal and legally binding agreement between a debtor and their creditors. The terms of the agreement are that the debtor will, over a pre-agreed period of time, pay back their unsecured debts at a rate that is financially manageable. The IVA will only cover unsecured debts, and there are certain debts, such as Student Loans, child maintenance arrears, and court fines that cannot be included.

If you have unsecured debts, you can check your eligibility by approaching a licensed insolvency practitioner such as NDH Financial. Your practitioner will work with you to determine what debts you owe, what assets you own and what you can afford to pay towards them. Once this initial assessment is completed, the insolvency practitioner will be able to tell you whether an IVA may be an appropriate solution. If the IVA is appropriate, and you do want to proceed, you will then work with the insolvency practitioner to prepare the necessary paperwork. This paperwork is then sent to your creditors for their approval.

If these creditors approve the IVA, the insolvency practitioner will proceed to set up and supervise it. Rather than make separate repayments to individual creditors, you will — as per the IVA’s terms — pay a single monthly payment to the insolvency practitioner.

This is intended to ease the ongoing burden of paying back debt — and you will agree to pay in monthly instalments for the IVA’s entire term, which can be 5 or 6 years. During this time, you will also need to comply with any other terms, such as providing further income and expenditure documentation every 12 months. Once you have made the required payments, and complied with the terms, the IVA is deemed completed. Any remaining, unsecured debt that was covered by the IVA will then be written off.

You can use an IVA to repay most unsecured debts, including those amassed from credit cards and store cards. Furthermore, as long as you comply with all conditions of the IVA, the creditors that approved it will be legally barred from pressuring you to repay your debts at a faster rate.

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Can An IVA Be Paid Off Early?

If you receive a windfall, such as inheritance, whilst your IVA is still in place, this money will be paid into your IVA, which may result in it finishing early. Alternatively, a third party, such as family or friends, may be willing to provide you with a lump sum to offer to your creditors.

If the money is a windfall or inheritance, it will be classed as an asset in your IVA. As a result, all of the funds will need to be paid into the IVA anyway. If the funds are sufficient to pay your debts in full, plus the fees and costs of the IVA, the IVA will end early and you will not be required to pay any further funds in. If it is not enough to pay your creditors in full, then you will continue to make payments into your IVA, until you have paid in full, or the agreed payment period ends.

Usually, early IVA payments for debts are made as a result of friends or relatives gifting a debtor money. The lump sum is offered to creditors in exchange for an early end of the IVA, and would require them to accept it, before the funds are paid in. As this money is from a third party, creditors do not have an automatic right to it, and creditors will take into account your ability to make further payments, and the payments already received into the IVA. Although creditors will usually look for a lump sum offer that provides them with a similar return as the proposal they originally agreed, there is no set amount that should be offered, and you should instead make your best offer.

After a certain period — typically three years — of the IVA, a loan would be another option for paying it off early. There are specialist lenders who work with people in IVA’s to obtain loans for this purpose. However, as using a loan for this purpose would not necessarily be the best strategy for everyone, you should first talk to your insolvency practitioner about the possibility.

It is always attractive to pay off debts as early as practically possible. However, in any case, your credit report will continue to list your IVA for six years following its approval date.

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Can An IVA Affect My Job?

It is up to you whether you let your employer know you have an IVA. Nonetheless, in some professions and industries, employment contracts can require holders of an IVA to disclose it.

Most employers don’t undertake regular credit checks on employees — who, in any case, would need to give express permission beforehand for this to happen.

In most instances, a worker would not be risking their job to any extent by taking out an IVA. Still, there remain certain jobs — like those of insolvency practitioner, accountant or banker — where the employee might first need their employer’s, or licensing body’s permission before seeking an IVA.

The IVA was introduced, in part, to give people in occupations that specifically prohibit bankruptcy, such as the armed forces or solicitors, a formal solution for dealing with their debts. Therefore, an employer, or a licensing body, may allow you to enter an IVA, even though you are prohibited from entering into bankruptcy.

The good news is that, for most jobs, applicants are not subjected to credit checks. The bad news is that some positions — like those of accountant or solicitor, and posts in the police or fire or prison service — do come with stringent financial vetting procedures. Hence, these particular jobs can be more difficult for people with an IVA to obtain, and you should always check with your employer or licensing body, before proposing an IVA.

If a potential employer asks whether you hold an IVA, you should be upfront and honest with your answer.

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Can An IVA Take My Inheritance?

An inheritance is where, when someone passes away, another person named in their will receives money or assets that belonged to the deceased. If you receive an inheritance of over £500 during your IVA, you will need to contribute the cash — or a share of an asset — to the IVA.

Your IVA is likely to include a windfall clause stipulating this — meaning that, if you do receive an inheritance of more than £500, you are required to notify the insolvency practitioner. The inheritance will subsequently be paid into the IVA. If the money is enough to pay your creditors in full, plus the fees and costs of the arrangement, the arrangement will be completed.

If it isn’t, you will need to continue with the pre-agreed IVA payment plan. Though IVA rules say that any money of more than £500 inherited during the IVA should be paid into it, your insolvency practitioner might be able to permit you to keep some of the inheritance in certain circumstances, or, they may be able to liaise with your creditors to allow you to keep some of the funds, but this would depend on creditor approval. This would only be in limited circumstances, and there would need to be a legitimate reason, for example, emergency house or vehicle repairs.

If you inherit £500 or less, then you will not have to introduce these into the IVA, however, you should still make your Supervisor aware.

Whatever the circumstances, if you do inherit during an IVA, you should discuss with your insolvency practitioner who will be able to advise you of the options available to you.

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IVA vs Bankruptcy: What’s The Difference?

If excessive debt has left you unable to pay the required payments, you could opt for one of the following two statutory debt solutions:

• Enter into an IVA
• Petition for bankruptcy

With an IVA, you would formally agree with your creditors to make an affordable repayment over a fixed period, typically five or six years. Before this agreement comes into force, 75% of your creditors who vote on the IVA will need to approve it.

In order to declare yourself bankrupt, you would need to complete — and pay for — an online application. Once the application has been submitted, and the order is made, you will then be declared bankrupt. An Official Receiver or Trustee will endeavour to sell assets of yours so that your creditors can be paid, for example, a property that you own, or a car over a certain value, but some assets — like reasonable household items, or items required for you to earn a living, provided they are of a reasonable value — will not be touched.

A bankrupt person who remains able to pay their creditors will be required to pay into an income payments order or agreement over three years, although you will usually be discharged from bankruptcy within 12 months, provided you comply with the Official Receiver or Trustee.

Whether you take out an IVA or go bankrupt, the action will leave a record on your credit file for six years. Also, your details will be on the individual Insolvency Register until three months after the IVA has closed or bankruptcy has ended.

With bankruptcy, you will have to give up possessions of value, like a property or vehicle, to pay off your debt. However, an IVA can, subject to creditor approval, protect all of your assets.

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Can I Get A Mortgage With An IVA?

Generally, obtaining a mortgage when repaying an IVA is difficult. Taking out a mortgage once the IVA has been fully paid off or is settled can be easier but still has some complications. You should therefore always seek independent financial advice when considering obtaining a mortgage.

Your chances of securing a mortgage will largely depend on the lender. Some lenders will turn down any applicants who have ever held an IVA. If you do have an IVA, certain lenders might decide against lending to you until it has been taken off your credit file.

Typically, this occurs after six years — but keep in mind that, even if your credit report no longer shows an IVA you once had, you would still need to tell a mortgage lender about it if they ask.

There are specialist lenders and brokers ready to offer mortgages to people who have had an IVA or still have one. However, these mortgages may come with higher interest rates and require a larger deposit than mortgages available to borrowers who have never held an IVA.

Usually, the more time that has passed between you completing your IVA and applying for a mortgage, the likelier you are to be lent one.

Therefore, the simplest strategy could be for you to wait just two years after the IVA has elapsed before you seek a mortgage — by which point, lenders might no longer class the IVA as recent.

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IVA For Self-Employed

Self-employed people can use an IVA (individual voluntary arrangement) to settle an array of unsecured debts. These include such debts amassed in either a personal or work capacity — with credit cards, unsecured loan repayments, unpaid self assessment tax, and unpaid business rates among the costs that can be covered.

There remain certain debts — like secured debts and child maintenance arrears — that could not be accounted for by an IVA. Neither would it be possible for you to use an IVA to pay off or settle debts related to a limited company, although if you have personally guaranteed a debt, they will not be able to take action against yourself personally.

For self-employed people experiencing financial hardship due to onerous debt, an IVA can be a more attractive remedy than bankruptcy. You could struggle to continue trading if you go bankrupt, as some of your assets — albeit usually not including reasonable tools of trade — will be seized. Subject to your occupation, there may be other practical restrictions, for example, you will not be able to trade unless it is in the name you were adjudged bankrupt, or a lease for a premise you operate may be terminated due to the bankruptcy. If you are a company director, you will not be allowed to continue acting as a director, without the leave of court.

In contrast, with an IVA, you can avoid restrictions that would arise because of bankruptcy. For example, subject to creditor approval, you wouldn’t have to lose your assets. The conditions of an IVA can also afford you more flexibility in your dealings with trade creditors and suppliers.

Before you can start utilising an IVA, you will have to ask a licensed insolvency practitioner such as NDH Financial to set one up on your behalf. The practitioner can assess your situation and business and help you to determine an affordable payment plan for the IVA.

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IVA vs Debt Relief Order

An IVA, or individual voluntary arrangement, is a formal arrangement where a debtor agrees to keep up with regular payments over a fixed period in order to clear debt to creditors. The payment period is typically five or six years, and any debt left over after this time is written off, provided you have complied with the terms of the IVA.

One alternative to an IVA is a DRO, or debt relief order. If you seek a DRO, you will need to apply for one — through an approved intermediary — to the official receiver, who will assess your eligibility for a DRO and, if you do obtain one, assist you while it is active.

The DRO itself will last for 12 months, or what is known as the moratorium period. During this period, you will need to keep the official receiver up to date with your financial circumstances, as any change may affect your eligibility — and, once the DRO has completed, you will be discharged from any remaining debt. You will need to make sure that you disclose all of your unsecured debts as part of the application, as they cannot be added once the DRO is in place.

IVAs and DROs therefore have many similarities. For example, in both instances, any interest and charges on the debt will be frozen while the formal debt solution is in place, and at the end of the process, any remaining, qualifying, unsecured debt is written off.

However, when deciding which is best for you, the following counts:

• IVA: Generally better for people who are capable of making a monthly payment of over £76 and have unsecured debts of over £7,000, or have assets worth more than £2,000.
• DRO: Better suited to people who are unable to afford £75 per month, do not have assets over £2,000 and have less than £30,000 of unsecured debt.

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How An IVA Affects Your Credit Rating

For as long as you have an IVA, details of it will be on the public register known as the Individual Insolvency Register, and remain on it until three months after the IVA has ended. Referring to the register, credit reference agencies will also store your IVA details on your credit reference file.

Before deciding whether to lend to you, a company or individual will look up your credit rating by checking your credit reference file. Since your credit details are supposed to help lenders judge your likely ability to pay back the money, you will reduce your credit score if you take out an IVA.

To a lender, the sight of an IVA on your credit report would be a warning sign that you have previously struggled with paying debt and so could constitute a high-risk borrower. As a result, an IVA can threaten your success in applying for credit such as a mortgage, loan or credit card. This risk is temporary, however.

Whilst the IVA is active, you may be denied credit altogether or offered it with a higher interest rate attached. However, while an IVA can make a short-term impact on your borrowing ability, note that, six years after the IVA’s start date, your credit report will cease to include the IVA details.

Basically, the longer it has been since you arranged an IVA, the less trace it will have left on your credit score.

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Can An IVA Be Refused?

If you are weighed down with debt and eager to ease this burden by applying for an individual voluntary arrangement (IVA), you may wonder whether it would be possible for your IVA application to be turned down — and what options would remain available to you if it was.

To arrange an IVA, you would need to first get in touch with an insolvency practitioner (IP), who will advise you on how likely your application is to succeed. Insolvency practitioners are experienced in negotiating with creditors to work towards securing their approval for individual voluntary arrangements.

Hence, at NDH Financial, our IP knows from experience what is likely to be required before creditors grant their approval. If the IP has good reason to doubt that the IVA will be approved, they will let you know and at this point, you may want to consider other options for dealing with your particular situation.

While individual creditors can differ in what they demand from an IVA proposal, many will be aware that, if you resorted to bankruptcy instead, they would be unlikely to recover much, if any, money from you. In comparison, agreeing to an IVA could be a more appealing prospect for them.

This is because, for the creditor, an IVA would usually incur far fewer costs than bankruptcy — meaning that, in an IVA, more money will be paid to creditors after the fees have been paid.

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How An IVA Works

An IVA is set up by an Insolvency Practitioner, who is a qualified professional that specialises in processes designed to help over indebted individuals and companies. They will charge fees for their part in setting up and helping you through your IVA. These fees are paid from the payments you make into an IVA, although some Insolvency Practitioners may request a contribution to their fee upfront.

You will work with an Insolvency Practitioner to determine an affordable payment to offer to your creditors.

The repayment plan commonly consists of affordable monthly payments paid to the insolvency practitioner who will then hand out the money to your creditors, keeping their own fees out of the money you have given them.

What an affordable payment consists of is figured out on the basis of your household income less your household expenses, which is also called your disposable income. Any regular source of income is taken into account, however, some sources of income may not be appropriate for an IVA.

Provided that you follow the terms of the IVA, the agreement will act as a form of legal protection and will shield you from unsecured debt creditors and bailiffs. Provided you comply with the terms of the IVA, any remaining, qualifying unsecured debt will be deemed settled at the end of the IVA.

If you’re considering applying for an IVA, NDH Financial offers a no obligation consultation service to help assess if an IVA is a suitable solution for you.

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IVA: How Long Does It Take to Set Up?

If you are eligible for an IVA and would like to take advantage of one, you will need to ask an insolvency practitioner (IP) to set up one for you. From this point, you can realistically expect to wait between three and six weeks overall before the IVA is up and running.

The process of setting up an IVA comprises a number of distinct steps. After you initially contact an IP, they will work with you to assess your financial circumstances and determine a monthly payment you would be able to make in a bid to clear your debts.

You will be asked to provide various forms of paperwork, like wage slips and bank statements, so that you can prove your financial situation. The IP will subsequently assist you in preparing the paperwork, known as a proposal, for your creditors to consider.

The paperwork preparation can take as long as a week, and then creditors are usually given up to three weeks to decide whether to approve the proposal.

Exactly how long it takes for an IVA to be implemented can depend on various factors. For example, it could take longer than you had originally expected to gather all of the information required for the proposal, or creditors might need additional time to make their minds up about it.

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IVA: Can I Keep My Car?

Usually, entering an IVA would permit you to keep your car if it is required for family- or work-related transport and not excessive in value. This remains the case even if the vehicle was bought via an ongoing hire purchase agreement, as long as the monthly payments are reasonable.

However, if your car is worth over £6,000, your creditors may ask why you couldn’t sell the vehicle and replace it with a less expensive model. The word ‘may’ is crucial here, as creditors could deem your circumstances to justify you keeping even a car as high as £10,000 in value.

Given that an IVA can potentially last up to five years and even slightly beyond, creditors could be willing to accept you keeping a relatively high-value car if they believe that it is sufficiently high in quality to last the entire term of the IVA without needing to be replaced.

Theoretically, a less expensive vehicle could also be lesser in quality, and so more easily break before the IVA expires. Hence, if you own such a car, the IVA proposal would need to include a clause allowing you to replace or repair the vehicle during the IVA’s period of validity.

You might also be able to argue that public transport would not meet your commuting needs; for example, if you work variable or unsocial hours.

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Will An IVA Stop Bailiffs?

A bailiff letter demanding payment can understandably cause stress. But even if you can't pay the full amount immediately, an IVA can help you manage this obligation more effectively.

Bailiffs only act once authorized by a court. For debts like council tax, VAT, CCJs, and income tax, a missed payment might trigger action. However, an IVA can assist with many unsecured debts and offer a way forward.

If you have entered an IVA and are meeting its terms, you are legally protected from bailiffs visiting your home or any further debt-related court action.

If a bailiff contacts you, ask them for proof of identity before showing them your IVA agreement. Registered bailiffs must carry ID, a certificate, or badge, and should be prepared to show this upon request.

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Can An IVA Take My PIP?

Receiving Personal Independence Payment (PIP) and entering an IVA can raise concerns — especially if you're relying on this benefit to cover the costs of a long-term condition or disability.

Creditors cannot usually take your PIP, as it's expected to be used solely for care or mobility needs. In bankruptcy and DROs, PIP is excluded from income assessments — and in most IVA cases, it should also be discounted when calculating disposable income.

If you use part of your PIP for non-essential costs, that amount could be considered in your IVA. However, licensed insolvency practitioners are bound by the Insolvency Code of Ethics and will recommend the most appropriate solution — such as DRO or bankruptcy — if an IVA isn’t right for you.

While an IVA may still be an option (especially if you own property or valuable assets), ensure all disability-related costs are clearly documented. This helps protect your PIP during any payment assessments.

If an IVA is your best route, rest assured your PIP is likely to be fully protected, provided it's essential for your living needs.

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Is An IVA Worth It?

If you're struggling with multiple debts, an Individual Voluntary Arrangement (IVA) could be a structured way to regain control. It allows you to repay your debts over 5–6 years through affordable monthly payments agreed upon with creditors.

An IVA may be worth it if your debts exceed £6,000 and you want legal protection from creditors while retaining some control over your finances. After successful completion, remaining unsecured debts included in the agreement are written off.

It's also reviewed annually to ensure payments remain affordable. However, if your total debt is less than £6,000, a simpler solution like a DRO or direct arrangement with creditors might be better — with lower costs and faster results.

Note that IVAs don’t cover all debt types. Secured debts, court fines, and child maintenance are excluded. Still, it can make managing your finances easier by reducing pressure from unsecured debt, giving you breathing room for essentials.

Overall, an IVA could be worthwhile — but only if it's tailored to your situation. A licensed Insolvency Practitioner will help determine whether this route is the best fit for your debt resolution journey.

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Can You Remove An IVA From A Credit Report?

Although an IVA is a private agreement between you and your creditors, it is still listed on the Insolvency Register and appears on your credit report from the date it begins — usually for six years.

This means even if you complete your IVA early, it won’t be removed from your credit report until the full six-year period has passed. The credit file will reflect the IVA as "completed", but the record itself remains until expiry.

While this can affect your ability to access high-quality credit, it’s temporary. Over time, the IVA will drop off your file, and you can begin rebuilding a healthy credit score.

It’s also worth noting that for someone to find out about your IVA on the public register, they would need to search for you directly. So, despite being public information, IVAs generally remain discreet.

In the long run, an IVA offers financial stability and can give you a clean slate to work from once it’s removed — helping to improve your future borrowing prospects.

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How Much Does An IVA Cost?

If you’re considering an IVA to tackle debt, it’s natural to worry about costs. Yes, there are fees involved, but the good news is that these are typically included in your monthly payments — not charged upfront.

There are two key fees in an IVA:

• Nominee Fee – Covers the setup and proposal work of the IVA.
• Supervisor Fee – Ongoing fee for managing the arrangement.

Additionally, there are small costs like insurance and registration fees, but again, these come from your monthly IVA payments. Most people don’t pay anything separately — it's all included.

Some firms may charge upfront fees, especially in complex cases, but NDH Financial does not. All our charges are taken from the IVA contributions once it's approved.

Creditors also agree on the fee structure when your IVA is approved, and sometimes they may limit how much the Insolvency Practitioner can take — making sure the majority goes to clearing your debt.

If your financial situation improves (e.g., through a bonus or windfall), you may be expected to contribute more or even pay off the full amount plus fees early — but only if affordable.

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Can I Get A Credit Card On A Debt Management Plan?

Considering a debt management plan (DMP) but wondering if you can still get a credit card? It’s technically possible — but usually not advisable.

DMPs are designed to help you repay debts in a more affordable way, often by negotiating reduced payments. They're a helpful tool for regaining financial stability without legal proceedings.

While a DMP isn’t formally listed like an IVA on your credit report, it does reflect missed or reduced payments — which can stay visible for up to six years, even after the final payment.

Getting a credit card during a DMP could risk undermining your progress. You might fall behind on your DMP repayments, making your credit situation worse in the long run.

If you find yourself relying on credit while on a DMP, it’s a signal that the plan may not be working as intended. DMPs should be sustainable and help you become debt-free — not lead you back into borrowing.

In such cases, other solutions — such as an IVA — may be worth exploring. Always review your situation carefully and get advice before applying for more credit while under a debt solution.

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How Does An IVA Affect You?

Entering into an individual voluntary arrangement (IVA) can impact various aspects of your life — both in the short and long term.

An IVA is often a better alternative to bankruptcy, especially for homeowners. While bankruptcy might require selling your home, an IVA typically allows you to keep it, with creditor approval — and often at a lower overall cost due to reduced fees.

Renting? An IVA usually won’t affect your tenancy, as long as you pay rent on time. However, being listed on the Individual Insolvency Register (IIR) can make moving to a new rental property more challenging.

During the IVA setup, an insolvency practitioner (IP) will review your finances — and while minimal savings and pensions are protected, you may be asked to contribute any extra savings toward your debt.

Day-to-day, life on an IVA can require lifestyle adjustments. You may struggle to access credit, affecting how you fund things like holidays or large seasonal expenses. While some budget allowances (e.g., gifts) are accepted, holidays are usually not covered. Additionally, if you earn extra income, up to 50% may go toward the IVA.

While challenging at times, an IVA is structured to help you clear unsecured debt in a manageable, legally protected way.

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Debt Management Plan vs IVA: Which Is Better?

If you're deciding how best to repay your debts, you might be weighing up an IVA (individual voluntary arrangement) versus a DMP (debt management plan). Knowing the key differences between the two is essential.

Both options allow you to make affordable monthly repayments to creditors. However, an IVA is a formal, legally binding insolvency solution, meaning your creditors are legally stopped from contacting you during the arrangement.

In contrast, a DMP is informal. While creditors often accept DMP payments, they’re still free to contact you, and there’s no legal protection. Typically, IVAs last 5–6 years, whereas a DMP continues until the full debt is repaid — which can take up to 10 years.

In an IVA, an Insolvency Practitioner will deduct fees from the payments you make. For DMPs, a Financial Conduct Authority (FCA) regulated provider will manage the plan — and may charge a monthly fee. However, some charitable organizations offer DMPs at no cost.

Ultimately, if you are considering an IVA, it’s best to consult a licensed insolvency practitioner like NDH Financial. They’ll assess your circumstances to determine the most suitable path forward.

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How To Apply For An IVA

If you're burdened with excessive debt, you might want to explore an individual voluntary arrangement (IVA) as a solution.

With this legally binding agreement, you can pay your debts through manageable monthly instalments — but it starts with a structured application process.

To begin, you’ll need to ask a licensed insolvency practitioner (IP) to set up an IVA. NDH Financial does not charge upfront fees or request payment if the IVA doesn’t go ahead.

The IP will assess your ability to pay over the IVA term (typically five to six years), considering:

• Your household income
• Your household expenditure
• Your assets
• Your level of debt

The IP will then present a proposal to your creditors. If 75% (by value) agree, the IVA is approved. You'll begin making monthly payments, and once complete, any remaining qualifying unsecured debt will be written off.

If you're unsure about proceeding, remember that NDH Financial offers no-obligation IVA consultations to help you decide whether it's right for you.

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What Happens If I Stop Paying My IVA?

If you’re struggling to make your payments, the first thing to do is contact your insolvency practitioner. They may be able to offer reduced payments or temporary payment breaks, subject to creditor approval.

To assess any change, you will need to submit up-to-date details about your household income and expenses. The insolvency practitioner will review this to evaluate what’s affordable.

If you can’t make any IVA payments and your creditors don’t approve a break, your IVA will fail. This means:

• Your IVA protection ends
• Your credit file will show the IVA as failed

In rare cases, creditors may request your insolvency practitioner to initiate bankruptcy proceedings — though this is not common, it remains a possibility.

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What Are the Pros And Cons Of An IVA?

One of the biggest benefits of an IVA is the legal protection it offers once approved. In some cases, you can even apply for this protection early via court (with an associated fee), although this depends on your situation.

Once the IVA is in place and you're compliant, creditors cannot contact you or take legal action, giving you protection from bailiffs and other enforcement action. You’re also allowed reasonable living costs to maintain essential secured payments.

If you're concerned about public exposure — don't be. An IVA is a private agreement between you and your creditors. It will appear on the Insolvency Register, but not in newspapers like with bankruptcies. Your home and other key assets can be protected during the IVA.

That said, there are downsides to consider. Your credit file will be negatively affected for six years after your IVA ends, making it harder to get loans or credit in the future.

While a poor credit rating isn’t the end of the world, it’s worth evaluating the trade-offs between protection and long-term impact when considering an IVA.

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What Is A Debt Relief Order (DRO)?

A Debt Relief Order (DRO) is a solution for individuals who owe less than £30,000, don’t own a home, have limited assets (under £2,000), and can’t afford to repay more than £75 per month.

With a DRO, you don’t make payments toward the debts included. It typically lasts 12 months and, if your situation doesn’t improve, the debts are written off at the end. However, if your financial situation changes, the DRO can be revoked.

Qualifying debts can include:

• Credit cards, overdrafts and personal loans
• Rent arrears, utility bills, council tax, income tax
• Benefit overpayments
• Hire purchase shortfalls or conditional sales
• Buy now, pay later debts
• Bills for professional services (vets, solicitors)
• Debts to friends or family
• Business debts

However, certain debts are not included in a DRO and still need to be paid, such as:

• Magistrates court fines or criminal compensation
• Child support and maintenance
• Student loans
• Social fund loans
• Compensation for death or injury

It’s important to note that these excluded debts don’t count toward the £30,000 DRO limit.

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What Happens At The End Of An IVA?

Once you make your final payment and have fulfilled other obligations like submitting annual review documents, you should receive a certificate of completion in the form of a final report and letter.

The completion certificate is usually issued within 6 months, often within 12 weeks. If there’s a delay beyond that, you can follow up with your IVA provider.

After receiving your certificate, you can begin rebuilding your credit score. Note that the IVA will stay on your credit report for six years from the date it began (or until the final payment, if longer).

Once you check your credit score, you can begin improving it by showing financial responsibility — this helps lenders evaluate your reliability.

Ways to improve your credit rating include paying rent, utility bills, and mobile bills on time, and responsibly using and repaying credit cards.

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Will An IVA Impact My Joint Mortgage?

If you’ve had an IVA, you must declare it on your mortgage application if asked. If the question is about current IVA status, and you’ve completed your payment plan, you may answer "no."

Lenders often ask if you’ve ever had debts, used debt management companies, or have outstanding loans. They will check your credit file, property data, and loan history.

While your credit report is a factor, it’s not the only one. Some lenders may accept applicants who’ve demonstrated financial recovery and responsibility after past issues.

Living with someone means shared finances, but there’s no definite rule on whether your IVA affects your partner (or vice versa). It depends on individual circumstances.

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