An Individual Voluntary Arrangement (IVA) is a debt solution designed for those struggling to repay their debts. Rather than repaying the full amount, an IVA allows you to make manageable payments over a set period, helping you regain financial stability.
While an IVA does impact your credit score, so does having unpaid debts. If you’re struggling to keep up with payments, an IVA might be the fresh start you need. Instead of dealing with mounting debt and missed payments, an IVA helps you take control and work toward becoming debt-free.
Setting up an IVA means agreeing to repay a manageable portion of your debt over a set period, usually five to six years. At the end of the agreement, any remaining debt covered by the IVA is legally written off. This structured approach allows individuals to regain financial stability while avoiding more severe consequences, such as bankruptcy.
An IVA is recorded on your credit file, which lowers your credit score. However, if you already have missed payments, defaults, or County Court Judgments (CCJs), your score may already be impacted. An IVA helps you deal with debt in a structured way, which can be beneficial in the long run.
While your credit options will be limited, using this period to build better financial habits can help in the long term
An IVA stays on your credit file for six years from the start date, even if you complete payments early. This can make borrowing money more difficult during this time, but once it’s removed, you have the opportunity to rebuild your credit profile.
While an IVA can make obtaining credit difficult during this period, once removed, you can begin working toward a healthier financial future.
Rebuilding your credit after an IVA requires patience and careful financial management. Taking the right steps can improve your credit rating over time.
We have helped over 11,300+ people improve their financial well-being, with over 1,500 reviews and a 4.9-star rating. If you’re ready to take control of your finances and start fresh, see how an IVA could help you today!
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Adam Southard is authorised as a Licensed Insolvency Practitioner in the United Kingdom by the Insolvency Practitioners Association, We only provide advice after completing or receiving an initial fact find where the individual(s) concerned meet the criteria for one of our insolvency solutions, therefore, all advice regarding Individual Voluntary Arrangements (IVA) is given in reasonable contemplation of an insolvency appointment.
Adam Southard is licensed to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association. Office Holder No. 11930
Insolvency Practitioner Directory- Insolvency Practitioner Details (bis.gov.uk)
What you need to know about Individual Voluntary Arrangements (Insolvency Service)
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