IVAs · 5 min read
IVA eligibility: who qualifies for an Individual Voluntary Arrangement?
There's no fixed legal minimum for an IVA, but most are only suitable if you owe a significant amount to two or more creditors and can afford regular payments. The typical eligibility factors, who IVAs don't suit and the alternatives.
- 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
There’s no legal minimum debt for an IVA, but an insolvency practitioner will usually only propose one if you owe a significant amount to two or more creditors, have a regular income that leaves an affordable monthly payment after essentials, and live in England, Wales or Northern Ireland. Your creditors must then vote to accept it. If your spare income is very low, a free Debt Relief Order may suit you better.
The main eligibility factors
| Factor | What’s usually needed |
|---|---|
| Where you live | England, Wales or Northern Ireland (Scotland has Protected Trust Deeds instead) |
| Amount of debt | Usually several thousand pounds or more of unsecured debt |
| Number of creditors | Usually two or more |
| Income | Regular and reasonably stable, from work, self-employment, pensions or sometimes benefits |
| Spare income | Enough left after essential costs to make a regular monthly payment |
| Not already insolvent | Not currently bankrupt, in a DRO or in another IVA |
| Creditor support | At least 75% of creditors (by value of those voting) must approve |
Why the amount matters
IVAs have fees, which are usually taken from your payments over five or six years. If your debts are relatively small, the fees can take up a large share of what you pay, and an informal arrangement may be cheaper. Read IVA fees explained.
Which debts count
IVAs deal with unsecured debts such as credit cards, loans, overdrafts, catalogues and council tax arrears. They can’t include magistrates’ court fines, student loans, child maintenance or secured debts like your mortgage. See our IVA guide.
Who an IVA usually doesn’t suit
- People with very low or no spare income. A free Debt Relief Order may be more suitable.
- People who could repay in full within a reasonable time. A payment arrangement or debt management plan may be cheaper.
- People with unstable income that makes five years of regular payments unrealistic.
- People whose main debts can’t be included, such as fines or student loans.
- People in Scotland, who would look at a Protected Trust Deed or other Scottish options instead.
What the adviser will look at
Before an IVA is proposed, an adviser should:
- review your income and spending using a standard financial statement
- list all your debts and creditors
- look at your assets, including any equity in your home
- explain all the options that could suit you, including free ones
- explain the costs, risks and length of an IVA in writing
- Advice on all your optionsIncluding free options such as a DRO
- Proposal prepared with an insolvency practitionerIncome, spending, assets and debts
- Creditors voteApproved if 75% (by value of those voting) agree
- IVA approvedIncluded creditors can't use bailiffs or court action
- Monthly payments, usually 5 to 6 yearsReviewed every year; fees come out of payments
- Homeowners: equity release in the final yearOr the IVA is usually extended by up to 12 months
- IVA completedRemaining included unsecured debt is written off
Simplified illustration. IVAs have fees, affect your credit rating for six years and can fail. Not advice.
Does an IVA stop bailiffs?
Once it’s approved, creditors bound by the IVA can’t use bailiffs or court action to collect the debts included. Before approval there’s no automatic protection, so Breathing Space is often used while it’s set up. Read can an IVA stop bailiffs?
Frequently asked questions
What is the minimum debt for an IVA?
There’s no legal minimum. In practice, most IVAs involve several thousand pounds or more of unsecured debt, because fees make small IVAs poor value.
Can I get an IVA with one creditor?
It’s unusual. IVAs are designed to deal with several creditors at once. With one creditor, a direct arrangement is usually simpler.
Can I get an IVA if I’m on benefits?
It’s possible if you have enough regular spare income, but many people on benefits find a DRO or another option more suitable. An adviser can check.
Can I get an IVA if I’ve been bankrupt before?
Yes, once you’ve been discharged, although creditors will take your history into account.
Sources
- GOV.UK, Individual Voluntary Arrangements
- Insolvency Act 1986, Part VIII
- Insolvency Service, Individual insolvency statistics
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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