The team behind IVAorg CIC have over 100 years combined experience across the IVA sector and have helped thousands of people to successfully complete their IVAs.
In order to help you navigate your way to debt freedom, we’ve come together, pooled our extensive knowledge and experience and created the ‘The Essential Guide to IVAs’, offering useful tips and advice designed to help you successfully complete your IVA journey.
We hope you’ll find it a useful point of reference along the way.
Maintain Good Communications with the IVA.org team
Without doubt, this is top of the list of things you can do to give your IVA the best chance of success.
We are here to help you navigate your IVA and we can only do that if you keep us informed should you experience difficulties with your IVA.
Just like you, we have an interest in your IVA completing successfully, so it’s important that we work together.
That’s why we want to encourage you to keep us updated with any changes to your personal circumstances, particularly if you start to experience issues with maintaining your IVA payments.
Top tip: We have a range of different measures available to us to help you should the need arise, but we will only be able to provide help if you keep us informed along the way.
We have a specialist supervisory team in place to support you so, if you need to help with any issues, simply call 0161 850 4909 and they will do all they can to assist.
Maintain a Positive Mental Attitude
One of the most important factors in determining whether your IVA will complete successfully will be your mental approach towards the IVA.
If you approach the IVA as if it were a 5 year jail term then, undoubtedly, you’re going to struggle; whereas if you approach the IVA like it were a new beginning, without the burden of your debt, then you’ll begin to feel the benefits straightaway.
Counting off the days to the end of your IVA will, undoubtedly, be a depressingly slow business. Yet when you think about it, an IVA has a similar term to that of a typical car loan, which most people tend to endure without a problem.
So why does entering an IVA feel so different? Well, it’s all in the mental approach and approaching the IVA with a positive mental attitude will help you enormously.
Top tip: If you’re struggling at some point in the IVA, try to remember the IVA benefits:
- If you are a homeowner, your property is safe.
- There is no interest or charges added to your debts during the IVA.
- Your creditors can’t take legal action against you.
- Creditors can’t hassle you for an increase in your repayments.
- You will be debt free when your IVA completes successfully.
- You will be debt free even if you can’t repay all your original debt.
These are all great reasons to maintain a positive mental attitude and should be recalled whenever you’re struggling.
Living Within a Budget
One of the biggest adjustments you’ll have to make will be related to your household budget.
As you know, your household budget has been assessed to ensure you have enough money to cover all your essential monthly expenditures. It does this by making sure each area of your budget has been assessed and provided for.
That’s fine in theory but, as we all know, costs fluctuate on a monthly basis, with some months being relatively cheap and others being particularly expensive. These swings in a fixed budget can be problematic, particularly when you no longer have access to lines of credit.
The truth is you’ll need to manage your budget carefully; otherwise you may hit problems.
Top tip: Make sure you set aside the different budget allocations for their intended purpose, so the money is there when you need it.
Using your car maintenance allowance to fund something else will cause you problems when you need to do essential works on your car. So be strict with yourself and, wherever possible, live within the limits of each allowance.
Top tip: Open a deposit account and transfer any excess funds you have at the end of each month. Then the allocations will be waiting in a safe place ready for when you need them.
Economise Wherever Possible.
One benefit of living within a budget will be felt when you manage to make savings, because it’ll be you that benefits from any savings you make. For example, if your monthly food allowance has been set at £250, and you manage one month to spend just £200 on food, you’re free to reallocate the £50 you’ve saved toward whatever you see fit.
Budgeting and economising can be taken to a whole new level if you’re prepared to start shopping around. Using discount vouchers and store loyalty cards whenever and wherever possible will make your money go further.
Top tip: “Watch the pennies and the pounds will take care of themselves” is as true today as it’s ever been.
Remember, every saving counts, so take every opportunity to economise, especially by searching out special offers when buying your everyday items.
IVA Annual Review
As part of our responsibilities as your IVA supervisor, we will undertake an annual review of your personal circumstances each year on, or near, each anniversary of the start of your IVA. The annual review is undertaken to determine whether you have experienced any changes in your IVA’s affordability.
In order to complete each review successfully you will be expected to provide proof of your current income, along with your latest 3 months bank statements when requested. Proof of your income could be by provision of your most recent P60 or a series of recent wage-slips.
If the gap between your household income and your household expenditure remains the same, then your IVA payments will stay the same too, but if the gap between the two widens you should expect your IVA payments to rise accordingly.
Top tip: Keep a copy of your budget allowances as we agreed each year – your first being found in your IVA proposal.
You’ll need to refer to these allowance figures at each annual review and updating your budget will be much more difficult without them.
Remember: The annual review’s objective is to establish the gap between your income and your expenditure. If hasn’t changed your IVA payment will stay the same. So, if your income has increased, make sure you account for any increases in your expenditure too, including increases to your utility bills and fuel costs, which are often overlooked.
Use your previously annual budget allowances as a guide. Don’t forget to include any new costs you have caused by any changes to your circumstances, as we may well be unaware of any changes until you inform us.
But also remember, if you can afford to pay more into your IVA you will be expected to do so.
Changes to your IVA budget
Your IVA’s affordability determined by the two separate elements of your budget, your household income and your household expenditure and it is the difference between these two figures that determines what you pay into your IVA.
When you experience a change in either of these two figures you can expect it to have an impact on your IVA payment.
Changes to your Income
It’s unlikely your income will stay exactly the same for the full duration of your IVA and, as you know, fluctuations in your income might have an effect on your IVA payments. Therefore, you should make yourself familiar with how any changes might affect you, in order to help keep your IVA on track.
Bonuses, Overtime and Commissions: If you’re an employee and receive some extra income you’ll have to notify us. All extra income that you receive above 10% of your normal take home pay will become subject to a 50-50 split with your creditors.
You’ll also be expected to notify us within 14 days of receiving the funds and then pay the 50% into your IVA within the next 14 days and failure to do so could have serious consequences as it could be considered a breach of your IVA’s terms.
Rise in Income: When you have a rise in your income without a corresponding rise in your expenditure, the chances are you’re going to have to increase your IVA contribution. That’s because your IVA says that if you can afford to pay more during the IVA then you will.
Again, all extra income above 10% of your normal take home pay will become subject to a 50-50 split with your creditors.
Fall in Income: If your income falls during your IVA without a corresponding fall in your expenditure, your budget will become stretched and, as a result, you could find it extremely difficult to maintain your IVA payment.
Where possible, you should look to make reductions in your expenditure but, if this proves impossible then you should call us as soon as you start experiencing difficulties, because we can help.
Top tip: Monitor your income and expenditure carefully and keep a track of any fluctuations you experience. Remember, communication is key, so if you’re experiencing problems, call us.
We have a vested interest in helping your IVA stay on track and we will do whatever we can to help.
Changes to your Expenditure
It’s normal to experience modest increases in expenditure over the course of a year, even if it’s just regular inflation. But keeping control over your costs of living is important when you are trying to maintain a balanced budget. That’s why you should be mindful of what you are spending and, whenever possible, look for opportunities to save money in order to help compensate for those increased costs you can’t control.
Obviously, experiencing a dramatic change to your personal circumstance, like moving home, getting married or starting a family, is likely to be more challenging and might require more than a simple adjustment to your daily spending habits.
So, again, if you see big changes on the horizon and have concerns about how these changes will impact on your IVA, then you should your contact us and, whenever possible, we will do all we can to ensure a smooth transition.
Top tip: Monitor your expenditure carefully and keep a track of any fluctuations you experience. Remember, communication is key, so if you’re experiencing problems, call us.
If your expenditure rises, explore ways to increase your income to compensate. Don’t forget to check for eligibility for support through the benefits system.
Again, remember communication is key, and if you’re experiencing problems, contact us and we will do all we can to help.
IVA Payment Problems
Inevitably some people will experience payment problems during their IVA.
If this is you, the first thing to remember is ‘don’t panic’ as we can help through one of two ways, without any major changes to your IVA.
Payment Reductions: The IVA Standing Committee recently introduced updates to the IVA protocol which went live on 01 July 2025, and with it came some favourable changes to help customers experiencing payment difficulties.
Subsequently, we now have the discretion to reduce your IVA payment by upto 20% if, through no fault of your own, you can no longer afford it. Typical justifiable reasons for this type of reduction would be increases in budget costs or a reduction in household income, or even a combination of the two.
If your change in circumstances require a larger reduction than the 20% threshold, then it is possible for us to approach your creditors through a Variation Meeting to ask for a larger reduction. Creditors can be receptive to larger reductions but, in turn, are likely to demand an extension to your IVA’s term, to help compensate them for the reduction.
Please Note – Unfortunately, IVAs that started before 01st July 2025 must still adhere to the older 2021 protocol which only allowed us discretion to reduce your payments by upto 15%, as was stated in your original proposal.
Payment Breaks: We also have the discretion to provide up to a 9-month payment break if, through no fault of your own, you can’t maintain your payment. Examples of reasons for a payment break request would be caused by unemployment, temporary loss of income or the need to repair or replace an expensive item, such as a vehicle or a washing machine.
If a payment break is agreed, then your missed IVA payments will be added to the end of your IVA, effectively extending the term in line with the same amount of months used in the break.
Top tip: Make contact with us as soon as you notice there’s a problem.
Whatever the reason behind your payment problem, you will, at some point, need to speak to us in order to get your IVA back on track, so there’s no point in delaying. We can then discuss what we can do to help and give your IVA the best chance of recovery.
Receiving Windfalls
‘Windfall’ is the term used to describe an unexpected financial gain.
A lottery win or an inheritance are both classed as windfalls, as are certain elements of an insurance payout or a redundancy payment if it’s large enough. In an IVA, it’s the windfall clause that details your obligations to your creditors by detailing what you must do should you receive a windfall during your IVA.
In almost every circumstance you will be required to pay all of the windfall funds into the IVA for the benefit of your creditors.
If the windfall is large enough to repay your original outstanding debt balances in full along with any outstanding IVA fees, then we will seek to conclude your IVA immediately.
If your windfall is insufficient to successfully draw your IVA to a close, then you’ll be expected to pay all of your windfall into the IVA and continue with your IVA payments as scheduled.
Your IVA would then continue until either your original outstanding balances and IVA fees have been paid in full, or until your IVA completes as originally agreed, whichever the sooner.
Top tip: If there is a possibility of you receiving a substantial inheritance during the term of your IVA you may be able to mitigate your exposure to receiving a windfall by taking independent and professional legal advice.
Remember, once you receive a windfall, you’re legally obliged to declare it.
Exceptions to the windfall clause
Redundancy:
If you receive a redundancy payment, you will be allowed to retain an amount equivalent to 6 months of your old net income (after tax), to financially support yourself whilst looking for a new job. Any surplus above the 6 months net income must be passed into the IVA.
If you successfully obtain a new job before the 6 months income runs out, you will be expected to transfer any remaining funds into your IVA.
A reassessment will then be undertaken to establish your new level of affordability and your IVA will continue. If your affordability to maintain your IVA payments has been compromised as a result of a lower income, then it is possible to seek a successful closure to your IVA using any remaining funds from the redundancy payment, or funds from a 3rd party.
Insurance Payouts:
If you receive an insurance payout related to a critical illness policy, then you could be allowed to retain some of this windfall to cover the costs of treatments or therapy. However, this will be at the discretion of your creditors and will usually be based on the personal circumstances surrounding the nature of the claim itself.
If your insurance payout is related to an injury claim, then you will be able to retain the element of the payout relating to damages for ‘pain and suffering’. Any other funds, such as those received for loss of earnings will be classed as a normal windfall and you should, therefore, expect to have to surrender them into your IVA.
Policies relating to income protection could be treated as income rather than as a windfall as, by definition, the received funds would be paid in lieu of your normal income but you would still need to disclose receipt of the funds to us if you need to trigger the policy.
Dealing with Home Equity – IVAs post 01st July 2025
If you are a homeowner, you should make yourself familiar with how an IVA will deal with your share of any equity in your home.
Assessing Equity in an IVA
As mentioned earlier, the IVA Standing Committee recently introduced updates to the IVA protocol which went live on 01 July 2025, simplifying how equity is dealt with in an IVA after this date.
The changes mean IVA applicants are no longer expected to attempt releasing funds from their home through remortgaging or taking out a secured loan, as was once required.
Instead, the equity position is reviewed right at the start of the IVA process. This upfront calculation establishes how much equity the applicant holds in their property and, as a result, allows the term of the IVA to be determined and fixed from the outset.
The calculation works by taking 85% of the property’s market value and subtracting any secured debts (such as a mortgage) along with any co-owner’s share.
If the applicant’s share of remaining equity is under £10,000, the IVA typically runs for 60 months, mirroring the structure of a standard IVA for someone without property.
If the equity share is £10,000 or more, an additional year of payments is added, making the IVA 72 months in total.
Because the calculation is done before the IVA starts, there’s no need for further property valuations during its term, providing clarity on the IVA’s term from day one.
Cases Involving Significant Equity
If a property has a particularly high level of equity, the standard IVA protocol may not be the most appropriate route. In these situations, a tailored IVA — or even an alternative debt solution — might be explored to ensure the best possible outcome for the applicant.
Dealing with Home Equity – IVAs pre July 2025
Unfortunately, IVAs that started before 01st July 2025 must still adhere to the older 2021 protocol in which the equity was dealt with very differently.
Under the old approach, if the applicant’s equity was assessed at under £5,000 before the IVA began, the arrangement was fixed at 60 months.
Where equity exceeded £5,000, the IVA was typically set for a six year term, with an obligation to attempt a remortgage around the fifth year and if successful, the arrangement would end early at that point.
An independent valuation is required around month 54 to confirm the equity position, with any equity release capped at 85% of the property’s market value and calculated only on the applicant’s share.
Creditors’ expectations were further limited by set conditions:
- The additional mortgage cost cannot exceed 50% of the current IVA payment.
- The total repaid (excluding statutory interest) cannot be more than the original debt.
- Repayment terms cannot extend beyond the later of retirement age or the mortgage’s end date.
- Remortgage costs, including redemption penalties, are deducted from the amount paid into the IVA.
- If the resulting IVA payment drops below £50 a month, the arrangement is finalised with the released funds.
- If no remortgage can be secured, the IVA continues to its planned six-year conclusion.
Top tip: If you have any concerns about how your IVA will deal with the equity in your home, then please just call the supervisory team. They will provide all the information you need to help you understand your obligations and how to meet them.
Selling your home during an IVA
Selling your home whilst in an IVA could have serious financial consequences because by turning your equity into cash, you may find yourself inadvertently subject to the Windfall Clause and risk the possibility of having to surrender everything above your 15% equity share into your IVA.
Please seek our guidance before you commit to selling your home. It may be possible for you to make a conditional offer to your creditors, by proposing a variation to your IVA that enables you to make a ‘Full & Final’ settlement using some of the sale proceeds.
If your creditors agree to your proposal, then you would avoid the Windfall Clause completely and potentially save yourself an awful lot of money.
Top tip: Call us to discuss selling your home before you make a decision, that way there will be no nasty surprises.
The IVA Closure Procedure
It usually takes us 3 – 6 months to formally close an IVA and we need this time to ensure all the necessary paperwork has been completed satisfactorily. Once we’re satisfied the paperwork’s in order and that you’ve satisfactorily fulfilled your obligation under the terms of the IVA, we’ll close your IVA and issue you a ‘Completion Certificate’.
Once the Completion Certificate is in your possession, your IVA is officially over and any debts that were left unpaid by your IVA will have been written off by your creditors.
Top tip: Send a copy of your completion certificate to the 3 main Credit Reference Agencies (CRAs) Experian, Equifax and Call Credit.
They will then update your credit file to show your IVA as being ‘Satisfied’. You should also check your name has been removed from the Insolvency Register after 3 months from your completion date. If it hasn’t you should bring it to the attention of the Insolvency Service, who will remove it for you.
Getting Credit after an IVA
As you know, an IVA will damage your credit rating for 6 years from the start date, as normally recorded on your file.
As a result, whilst it’s perfectly acceptable for you to try and obtain credit after your IVA has completed successfully, the likelihood is your application will be rejected.
However, after 6 years from the start date of your IVA has elapsed, your IVA will be removed from your credit file and your chances of obtaining credit will improve dramatically.
It’s worth checking your credit file at this point, just to ensure there are no errors and that everything is recorded correctly.
By seeking credit from specialist lenders such as Capital One, Vanquis.co.uk or Aquacard.co.uk you can build your credit rating up over a few months. Simply using new credit facilities and making regular repayments will be all that’s required to recover your creditworthiness.
You should also talk to your bank and request an upgrade to a regular current account, which generally come with an overdraft and cheque book.
Top tip: Start rebuilding creditors trust by proving you can handle credit responsibly. Make sure you don’t over-stretch yourself and always make your contractual payments on time.
