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An Individual Voluntary Arrangement (IVA) is an agreement with your creditors to pay all or part of your debts. You agree to make regular payments to an insolvency practitioner, who will divide this money between your creditors.

An IVA can give you more control of your assets than bankruptcy.

The Money Helper Service has information on organisations that can give you free advice about whether an IVA is right for you.

Get an Individual Voluntary Arrangement (IVA)

Use an insolvency practitioner to get an IVA.

Your insolvency practitioner works out what you can afford to repay and how long the IVA lasts.

The IVA will start if the creditors holding 75% of your debts agree to it. It will apply to all your IVA creditors, including any who disagreed to it.

An IVA will stop your creditors taking action against you for your debts.

Your responsibilities

Your IVA can be cancelled by the insolvency practitioner if you don’t keep up your repayments. The insolvency practitioner can make you bankrupt.

You may still be able to keep your business running, if you have one.

Public records

Your IVA will be added to the individual insolvency register. It’s removed 3 months after the IVA ends.

Bankruptcy is a formal solution where you legally declare your inability to repay your debts. Many people consider bankruptcy to be their "last resort" when looking for a debt solution, but sometimes it can allow you to make a fresh start and be debt free in around 12 months. You may be expected to make repayments into your bankruptcy for up to 3 years.

Bankruptcy can come with some consequences that you might want to think about carefully before choosing this as your most preferred option and there may be alternative debt solutions available to you that are more suited to your situation. You can declare yourself bankrupt or if you owe over £5,000.00 your creditors may petition for your bankruptcy.>

A Debt Relief Order (Also known as a DRO) is a formal Insolvency solution you can apply for if you are living in England & Wales and struggling with debts up to £30,000, providing you haven’t entered into a DRO in the last 3 years. Your assets are worth less than £2,000 and you have a monthly disposable income of less than £75.00.

You can do a DRO in Northern Ireland, but the criteria is slightly different. In order to apply for a DRO you must have debts up to £20,000. Your assets are worth less than £1,000 and you have a monthly disposable income of less than £50.00.

A DRO is sometimes referred to as a form of mini bankruptcy. It is also a much shorter and cheaper to do than Bankruptcy, it normally costs £90 and after 12 months all debts that were included in the DRO will be written off.

A Debt Management Plan (DMP) is a flexible and informal debt solution that is set up between you and your creditors. A DMP may be suitable if you are struggling to manage your debts (above £1,200) and can afford to make a monthly repayment.

A Debt Management Plan allows for one new and affordable repayment that will be shared with your creditors. It is one of the most flexible solutions, which can allow for changes in your situation to be catered for. In a DMP, you repay 100% of the debt back, repaying less than the contractual payments may result in you paying more back and it taking longer to repay.