Understanding Priority and Non-Priority Debts
Some debts need to be dealt with immediately to avoid serious consequences. Others, while still important, don’t carry the same urgency.
April 23, 2025
How Does An IVA Work
An IVA or Individual Voluntary Arrangement is a contract with creditors, which allows you to repay the debts in regular instalments.
An IVA is set up and managed by a qualified Insolvency Practitioner (IP). They will work out the repayment plan which will calculate how much is paid each month, and for how long typically over 5 to 6 years, and act as the intermediary between an individual and their creditors, to check they agree with the set monthly amounts.
Here is what you can expect when you apply for an IVA:
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Initial consultation
The first stage in the IVA process is scheduling an initial consultation with a Licensed Insolvency Practitioner for free debt advice.
During the call, all options will be discussed to see if an IVA is in your best interests or an alternative debt solution would be better suited to your financial circumstances.
IVA proposal
If you are seen fit for an IVA, your IP will ask you to provide some additional information to help them prepare your arrangement.
Once the necessary documentation has been provided, you will be sent a copy of your IVA proposal for you to review, sign and return.
Creditors meeting
When you are happy with your IVA proposal, the next step is arranging a meeting with your creditors known as a creditors meeting.
As long as 75% of creditors give their approval to the IP’s proposal, the IVA will go ahead.
IVA agreement
In this stage of the IVA process you will now be legally protected by, which means your assets are safe and your creditors will not contact you or take legal action against you for the money owed because you have agreed to make regular payments towards the debt over the space of 5 – 6 years.
Completion certificate
Once you have fulfilled the obligations of your IVA typically after five years, the outstanding balance on your original debt will be written off and you will be officially released from your debts.
You will also be presented with a completion certificate to confirm that you have successfully completed your IVA and are now debt-free.
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Learn more about managing your debt:
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Advice Centre Group Ltd registered in England and Wales (14322979). Registered office: Second Floor A, Cheadle Place, Cheadle, Cheshire, England, SK8 2JX.
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)
We provide solutions to individuals throughout the UK, We Will help recommend solutions available to your circumstances in which you can then make an informed decision about which solution you qualify for is best for you and your circumstances.