IVA Solicitors
An IVA lets you repay what you can genuinely afford — and writes off the rest. It is a legally binding arrangement with your creditors, not just a promise. A solicitor ensures it is properly structured and approved.
An Individual Voluntary Arrangement is a formal statutory process under the Insolvency Act 1986. A qualified insolvency practitioner prepares a proposal — setting out what you can afford to repay over a defined period (typically 5 years) — and submits it to your creditors. If creditors holding 75% of the value of the debt vote in favour, the IVA binds all unsecured creditors — including those who voted against. On successful completion, the remaining unsecured debt is written off and you are discharged from the arrangement. A solicitor will advise on whether an IVA is the right option and ensure the proposal is properly structured to maximise the chance of creditor approval.
How an IVA Works
Individual Voluntary Arrangements — the process, the protections, and what happens when it completes.
An IVA is a formal, court-supervised agreement between you and your unsecured creditors. It is not a negotiation — it is a statutory process with binding legal effect. A solicitor and insolvency practitioner will ensure it is correctly prepared and implemented.
Who is suitable for an IVA?
An IVA is most suitable where: you have unsecured debts of at least £10,000 (typically £15,000 or more); you have a regular income with a surplus (after essential living expenses) that can be paid into the arrangement each month; and you have assets — particularly equity in a property — that you want to protect from the consequences of bankruptcy. An IVA avoids the automatic realisation of assets (including a share of property equity) that bankruptcy produces. A solicitor will assess your overall financial position and advise on whether an IVA or another debt solution is more appropriate for your specific circumstances.
The proposal — what it contains and how creditors vote
The IVA proposal is a detailed document prepared by the insolvency practitioner — setting out the debts owed, the assets held, income and expenditure, the offer to creditors (typically a monthly contribution over 5 years), and the terms of the arrangement. The proposal is sent to creditors who vote on it — either at a creditors' meeting or by a decision procedure. If creditors representing 75% of the total voting debt value vote in favour, the IVA is approved and binds all creditors — including those who voted against or did not vote. A solicitor will ensure the proposal is compelling and realistic — maximising the chance of the 75% approval threshold being met.
The moratorium — protection from enforcement during the IVA process
From the moment the nominee (the insolvency practitioner) files the proposal with the court, a moratorium takes effect — creditors cannot take enforcement action (bailiff visits, charging orders, attachment of earnings, bankruptcy petitions) while the proposal is being considered. This provides immediate breathing space. Once the IVA is approved, the moratorium becomes permanent for the duration of the arrangement — creditors bound by the IVA cannot take any independent enforcement action. A solicitor will ensure the moratorium is in place before any creditor takes further action and will challenge any breach of the moratorium by a creditor attempting to enforce outside the IVA.
Property and equity — the IVA and your home
Where you own a property with equity, the IVA proposal will typically include a clause requiring you to attempt to remortgage in year 4 to release equity for creditors — but only where refinancing is available on reasonable terms. Where no refinancing is available, the arrangement may be extended by 12 months in lieu. The IVA does not automatically force the sale of your home in the way that bankruptcy can — it is one of the key protections an IVA provides over bankruptcy where property equity is a concern. A solicitor will advise on how the equity clause will be structured and what your obligations are in year 4.
Completing the IVA — discharge and credit
On successful completion of the IVA — all contributions paid, all conditions met — the insolvency practitioner issues a completion certificate and the remaining unsecured debt is written off. You are discharged from the arrangement and the IVA is removed from the Insolvency Register. The IVA remains on your credit file for 6 years from the date it was approved — but on completion, your credit position begins to recover. A solicitor will ensure the completion process is correctly managed and that the insolvency practitioner issues the certificate promptly on the final payment being made.
IVA failure — what happens and what the options are
Where the debtor cannot maintain the IVA contributions — due to a change in circumstances, a fall in income, or an unexpected expense — the arrangement may fail. A failed IVA does not automatically result in bankruptcy — the insolvency practitioner will first consider whether the proposal can be varied to reflect the changed circumstances. Where the IVA cannot continue on any realistic basis, the supervisor may petition for bankruptcy. A solicitor will advise on the options where an IVA is at risk of failing — including a variation proposal to creditors — and on the consequences of failure versus the options that remain.