IVAs · 5 min read
Is an IVA a good idea? The honest pros and cons
An IVA can stop bailiffs, freeze interest and write off debt, but it has fees, lasts years and affects your credit rating. A balanced look at the pros and cons, who it suits and the questions to ask first.
- Fact-checked
- Against official sources
- Last updated
- Next review due
- April 2027
- Applies to
- England and Wales
- Sources
- 3 listed on this page
Independent guidance, not a government service. This page is general information about the law in England and Wales, not financial or legal advice. Debt solutions have fees, risks and consequences. For free, impartial advice, contact MoneyHelper or a debt charity.
The short answer
An IVA can be a good idea if you have a regular income, owe a significant amount to several creditors and want to protect your home. It’s legally binding, stops bailiffs for the debts included, freezes interest and writes off what’s left at the end. But it has fees, usually lasts five to six years, affects your credit rating for six years and can fail. It’s not right for everyone, and free options may suit you better.
IVAs are the most common form of personal insolvency in England and Wales: 71,841 were registered in 2025 (Insolvency Service). They’re also the debt solution the FCA has warned about most, because some adverts push people towards them whether or not they’re suitable. Here’s a balanced view.
The pros
- Legally binding. Once approved, creditors included can’t chase you, add interest or take court action.
- Stops bailiffs for the debts included, such as council tax arrears. Read can an IVA stop bailiffs?
- One affordable monthly payment, based on what you can afford after essential costs.
- Debt written off at the end. Any remaining unsecured debt included in the IVA is written off when you complete it.
- Your home is usually protected. You won’t normally be forced to sell, although you may need to release equity. Read IVAs and your home.
- Less impact on some jobs than bankruptcy, and fewer restrictions.
The cons
- Fees, usually several thousand pounds over the life of the IVA, taken from your payments. Read IVA fees explained.
- A long commitment, usually five years and often six for homeowners.
- Credit rating affected for six years, and your name on the public Individual Insolvency Register.
- Windfalls like inheritances or bonuses usually go to your creditors.
- It can fail if you can’t keep up the payments, leaving you with debts and possibly facing bankruptcy. Read what happens if an IVA fails?
- Not all debts can be included, such as fines and student loans.
- Annual reviews may increase your payments if your income rises.
Who an IVA usually suits
| Usually suits | Usually doesn’t suit |
|---|---|
| Regular, stable income | Very low or no spare income |
| Significant debts to several creditors | Small debts or a single creditor |
| Homeowners who want to keep their home | People who could repay in full fairly quickly |
| People whose job could be affected by bankruptcy | People whose main debts can’t be included |
Alternatives to consider first
- Debt Relief Order – free, 12 months, for low income and few assets. See the DRO guide.
- Debt management plan – informal, free from charities, but you repay in full. See IVA vs debt management plan.
- Bankruptcy – quicker, but riskier for your home. See IVA vs bankruptcy.
- Breathing Space – 60 days’ protection while you decide. See the Breathing Space guide.
Can repay in full, just slowly
Payment arrangements or a debt management plan
Need time to get advice
Breathing Space (60 days' protection)
Low income, few assets, debts up to £50,000
Debt Relief Order (free)
Regular spare income, want to protect your home
Individual Voluntary Arrangement (fees apply)
Can't repay in a reasonable time, DRO not possible
Bankruptcy (£680 fee)
Not sure?
Free advice from MoneyHelper, or speak to an FCA-authorised adviser
Simplified illustration only. The right option depends on your full circumstances. Every formal solution affects your credit rating. Not advice.
Questions to ask any IVA adviser
- What other options did you consider for me, and why is an IVA better?
- What will the total fees be, and how much will my creditors get?
- What happens if my income drops or I lose my job?
- What will happen to my home?
- How are you paid, and do you receive commission?
A good adviser will answer all of these clearly and won’t pressure you to sign on the first call.
Frequently asked questions
Is an IVA a government scheme?
No. IVAs are set out in law and run by licensed insolvency practitioners, but they’re not a government scheme.
How much debt will an IVA write off?
Nobody can promise an amount in advance. It depends on what you can pay, for how long, and the fees.
Will an IVA affect my partner?
Your partner’s credit file isn’t affected unless you have joint debts or financial links. Their income may be taken into account when working out household costs.
Sources
- Insolvency Service, Individual insolvency statistics, December 2025
- GOV.UK, Individual Voluntary Arrangements
- FCA, Unauthorised or unsuitable debt advice
How we wrote this article
- Research: written from primary sources such as legislation.gov.uk, GOV.UK and the Insolvency Service, then fact-checked by a second member of our team. The sources are listed above.
- Checked: last checked on . Next review due April 2027, or sooner if the rules change.
- Scope: applies to England and Wales. If you live in Scotland or Northern Ireland, read our Scotland and Northern Ireland guide. It is general information, not personal advice.
- Independence: we are not a government website or service, and we are not connected to any council, court or enforcement company.
- Money: we may receive a fee if we introduce you to a debt advice firm. This doesn't change what we write. How we're paid.
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