Individual Voluntary Arrangements

Individual Voluntary Arrangements

An Individual Voluntary Arrangement (IVA) is a legally binding agreement between you and your unsecured creditors, arranged and supervised by a Licensed Insolvency Practitioner (IP). In short you agree to pay back the maximum you can afford over a specified period of time, usually 5 years, at the end of which period your creditors agree to write off any remaining balances.

We will work with you to calculate the maximum monthly payment you are able to make and also assess whether you have anything else you are able to offer to your creditors to enhance the agreement e.g. from the sale of an asset or savings.

At Angel Advance we have an IP who will advise you on the terms of the agreement to maximise the chances of acceptance by your creditors and will assist you in preparing the legal document.

We do not charge you for advice about an IVA or for help with the preparation of the documents. If you are in a debt management plan already it will continue as normal until your IVA has been approved.

We do charge fees for the work both for getting the agreement approved by your creditors and for monitoring it, but these fees are agreed by your creditors and are taken out of the payments made by you once the arrangement has been approved, so you do not pay anything extra to cover the fees. However, the creditors allow us to take our fees before we make payments to them which means that if you did find yourself with sufficient funds to pay your creditors in full, because we take a fee first, you would need to pay our fees in addition to the payments to your creditors. The fees we usually charge are £2000 to set up the IVA (nominee's fee) and 15% of all future payments into the IVA (supervisor's fee).

Is an IVA the right solution for you?

An IVA is a form of insolvency and is a legally binding agreement therefore it is important that you consider whether:

You feel able to commit to a regular payment for the next 5 years
You may be able to resolve your financial problems without the need for a formal arrangement e.g. if you are expecting a pay rise or could sell an asset to pay your debts
You are willing to be open and honest with your creditors about everything that you owe and all of the assets that you have
You are willing to provide the Insolvency Practitioner with copies of your wage slips or other proof of income each year. A review of income and expenditure is usually a required term of the agreement
You are in financial difficulty and cannot make the required payments to your creditors
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You will pay an amount that you can afford over a limited period; usually 5 or 6 years

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Provided that you fulfil the terms of your IVA, the remainder of your debts will be written off at the end of the term

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Your creditors cannot pursue you for the debts once the IVA is agreed

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Your creditors cannot apply interest or charges to your debts

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If you are a homeowner, you will usually be able to remain in your home


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It is a formal agreement; if you fail to keep to your side of the agreement the arrangement may fail and you may find yourself owing as much as you did at the start

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The arrangement must be recorded on the Insolvency Register

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If you have a property, the creditors will expect you to try to remortgage towards the end of the agreement to release funds to be paid in to the IVA. If you are unable to do so the arrangement may be extended for a further 12 months

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Some debts such as mortgages, secured loans, taxes and fines cannot be included in an IVA so you will remain responsible for paying these

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You cannot take out further borrowing during the course of the arrangement

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If your situation changes for the better you will be expected to pay more to your creditors

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It will be recorded on your credit file and will affect your ability to obtain credit

Frequently asked questions


An IVA is a formal, legal agreement between you and your creditors.


You prepare a proposal to your creditors. An Insolvency Practitioner considers the proposal and, if he/she considers it appropriate, calls a meeting of creditors to consider it. If 75% of your creditors agree to the proposal it will be accepted. They may suggest changes to the proposal which would be discussed with you. When the terms of the arrangement are agreed by you and your creditors the arrangement is approved.


The Protocol is an agreement which provides a structure, approved by the major banks and credit organisations, for dealing with consumer IVAs. If Insolvency Practitioners follow the requirements of the protocol in preparing the proposal, creditors who have accepted the content of the protocol are expected to adhere to the terms.


It is the formal document which forms the basis of your agreement with creditors.


The terms of the proposal will be specific to your circumstances but your creditors will expect you to pay the maximum you can afford on a monthly basis, for the duration of the IVA. For example, if your income increases by more than 10% they will expect you to increase your payments and if you receive a lump sum you should pay that into the arrangement too. If you have other assets they may have to be used for the arrangement as well; we will discuss with you how your assets can be included or excluded from the arrangement depending on your circumstances.


During the IVA the creditors are required to agree to freeze all interest and charges on your debts. If you keep up your side of the agreement, whatever is left owing at the end of the IVA will be written off by your creditors. This means that you only pay back what you can afford during the term of the arrangement.


If you do not have enough income to make monthly payments, you can still do an IVA providing you can make a one-off lump sum payment. There are a number of ways this money can be raised. For example, a friend, relative or third party may give you a gift in order to clear your debts, you could release the equity in your property or surrender a life policy. The creditors are likely to accept writing off the majority of your debt if it is clear to them this is the only solution.

In a lump sum IVA the whole process can take as little as 3 months compared with 5 years in a monthly payment IVA.


An IVA can be agreed and in place in less than 6 weeks. For you this will mean a suspension of all legal action, no further worrying phone calls or being chased by debt collection agencies.


Setting up an IVA is a simple process; most of the work is carried out by us. We will deal directly with your creditors. The process entails a number of steps:

  1. You are referred to us, or can apply directly to us, and we request some basic information from you. If we’re able to help you we will then either set up a meeting with you or continue to communicate by phone or email, whichever suits you best. During this process we will confirm whether or not an IVA is the right option for you.
  2. We will then ask you to provide us with documentary evidence concerning your debts, monthly income and expenditure, any assets etc. We have to give a clear summary of your financial situation for the creditors.
  3. When we have all the information, we will draft your IVA proposal (your offer to the creditors). This is a legal document and includes your background information and the details of your offer, in addition to further information about the administration of the arrangement.
  4. You then approve and sign the IVA Proposal documents. The Insolvency Practitioner will consider them to ensure that your offer is fair to both you and your creditors. The Insolvency Practitioner will also prepare a report which is sent to your creditors with your proposal.
  5. At the same time the Insolvency Practitioner will arrange a meeting date for your creditors to vote on your proposal. You will not usually be expected to attend the meeting although you must be available.

We do not charge you a fee for the help and advice before your IVA is approved by your creditors, however, we can’t work for free! The proposal will specify the amount to be paid to the Insolvency Practitioner whilst appointed as Nominee and Supervisor of your arrangement. These fees have to be approved by your creditors because they are taken from the amount paid into the arrangement and hence reduce the amount that your creditors will get. The creditors understand and accept this. For you this means that once your arrangement is approved, you only pay the regular payments you have agreed to.

The fees that creditors usually require are £1000 for the nominee’s fee and 15% of the total amount paid into the arrangement for the supervisor’s fee.


If you have equity in your property you may have to re-mortgage to release equity which will be paid into the IVA. You won’t have to re-mortgage if it will make the payments unaffordable or if it will take your mortgage above 85% of the value of your property, but in these cases you may need to pay into your IVA for an extra year instead.


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