In this guide
Mis-sold Overdrafts
Mis-sold Mortgages
Mis-sold Credit | Store Cards
Mis-sold PCP Car Loans
Mis-sold Fraud & Scam Advice
Mis-sold Pensions & Investments
Hidden | Undisclosed Commissions
Mis-sold Pay Day Loans
You might also like:
Individual Voluntary Arrangements (IVA) Explained
Latest Updates
By David TurnerAn Individual Voluntary Arrangement (IVA) is a way to write off debt and freeze interest pays in many cases, here we go through the pros and cons of IVAs.
Published: 12/02/2025 – 11:59 | Updated: 12/02/2025 – 16:10
What is an IVA and How Does It Work?
What is an IVA? And is one right for you?
An Individual Voluntary Arrangement (IVA) can help some people write off a portion of their debts, but it’s not suitable for everyone. Companies that set up IVAs make substantial profits and often emphasize the benefits while downplaying the drawbacks.
Understanding both the advantages and risks is essential before proceeding with an IVA. Additionally, exploring alternative debt solutions may be beneficial.
Contents
- A Quick Overview of an IVA
- What Happens During an IVA
- Problems That Can Occur With IVAs
- What May Change During the IVA
- When a Tight IVA Can Turn Into a Disaster
- The “Secured Loan Clause”
- Ending the IVA Early
- Exploring Better Alternatives
- Comparing Other Options
- Common Misconceptions About IVAs
- How an IVA is Set Up
- Summary
A Quick Overview of an IVA
An IVA is a legally binding agreement between you and your creditors to repay unsecured debts, such as loans, credit cards, and overdrafts.
- Fixed monthly payments over five to six years.
- Interest is frozen, and creditors cannot take legal action.
- Payments increase if your income rises, but the term remains the same.
- Payments can be reduced if financial hardship occurs, but many IVAs still fail.
- Homeowners may need to release equity in the final year or extend payments.
- At the end of the term, remaining unsecured debt is written off.
Problems That Can Occur With IVAs
Common challenges during the IVA term include:
- Rising living costs, such as increased rent or mortgage payments.
- Unexpected expenses, such as car repairs or child-related costs.
- Difficulties moving house or obtaining new credit due to a poor credit rating.
How an IVA is Set Up
An IVA must be arranged through an IVA firm. Choose a reputable provider that prioritizes transparency. Ask all your questions before signing any agreement.
Comparing Other Options
Before committing to an IVA, consider alternative debt solutions:
Debt Relief Order (DRO)
- Suitable for renters with debts under £50,000 (from June 2024).
Bankruptcy
- A faster and simpler option for those without significant assets.
Debt Management Plan (DMP)
- More flexible than an IVA and better if your financial situation might change.
Summary
Pros:
- Interest frozen, no creditor harassment, and debts written off after completion.
Cons:
- Lack of flexibility, high failure rates, and long-term credit impact.
Debt Advice Guy says: IVAs suit individuals with large debts (£15,000+) who have assets to protect and a stable income. However, always explore other options first.
What is an IVA and How Does It Work?
What is an IVA? And is one right for you?
An Individual Voluntary Arrangement (IVA) can help some people write off a portion of their debts, but it’s not suitable for everyone. Companies that set up IVAs make substantial profits and often emphasize the benefits while downplaying the drawbacks.
Understanding both the advantages and risks is essential before proceeding with an IVA. Additionally, exploring alternative debt solutions may be beneficial.
Contents
- A Quick Overview of an IVA
- What Happens During an IVA
- Problems That Can Occur With IVAs
- What May Change During the IVA
- When a Tight IVA Can Turn Into a Disaster
- The “Secured Loan Clause”
- Ending the IVA Early
- Exploring Better Alternatives
- Comparing Other Options
- Common Misconceptions About IVAs
- How an IVA is Set Up
- Summary
A Quick Overview of an IVA
An IVA is a legally binding agreement between you and your creditors to repay unsecured debts, such as loans, credit cards, and overdrafts.
- Fixed monthly payments over five to six years.
- Interest is frozen, and creditors cannot take legal action.
- Payments increase if your income rises, but the term remains the same.
- Payments can be reduced if financial hardship occurs, but many IVAs still fail.
- Homeowners may need to release equity in the final year or extend payments.
- At the end of the term, remaining unsecured debt is written off.
Problems That Can Occur With IVAs
Common challenges during the IVA term include:
- Rising living costs, such as increased rent or mortgage payments.
- Unexpected expenses, such as car repairs or child-related costs.
- Difficulties moving house or obtaining new credit due to a poor credit rating.
How an IVA is Set Up
An IVA must be arranged through an IVA firm. Choose a reputable provider that prioritizes transparency. Ask all your questions before signing any agreement.
Comparing Other Options
Before committing to an IVA, consider alternative debt solutions:
Debt Relief Order (DRO)- Suitable for renters with debts under £50,000 (from June 2024).
- A faster and simpler option for those without significant assets.
- More flexible than an IVA and better if your financial situation might change.
Summary
Pros:
- Interest frozen, no creditor harassment, and debts written off after completion.
Cons:
- Lack of flexibility, high failure rates, and long-term credit impact.
Debt Advice Guy says: IVAs suit individuals with large debts (£15,000+) who have assets to protect and a stable income. However, always explore other options first.
Latest Mis-sold Finance Guy Overdraft News
The latest mis-sold overdraft advice...
If you have been lent an overdraft you cannot hope to repay, never asked for, or face excessive fees then you may have a claim against your lender.
Mis-sold CAR PCP Loans
Did you drive away with more than you could afford? If you were sold PCP finance and it had hidden commission affecting the choice of loan you might be entitled to a claim.
Mis-sold Store cards?
Repayments on many store cards can be too high to manage, often leading people deeper into debt!
Unsustainable Credit Card Debt?
High costs, unsuitable terms, or long-term financial strain?
Mis-sold An Excessive Pay Day Loan?
Long-term Pay Day Loan interest issues?
This guide will help you make an affordability complaint.
Pay Day Loan Distress?
Faced with unreasonable debt and unable to make headway?
This guide will help you make an affordability complaint.
Latest Mis-sold Finance Guy Overdraft News
The latest mis-sold overdraft advice...
Have you been lent an overdraft you cannot hope to repay or never asked for, then you may have a claim?
Mis-sold CAR PCP Loans
Did you drive away with more than you could afford? If you were sold PCP finance and it had hidden commission you might be able to claim.
Mis-sold Store cards?
Repayments on many store cards can be too high to manage?
Unsustainable Credit Card Debt?
High costs, unsuitable terms, or long-term financial strain?
Mis-sold An Excessive Pay Day Loan?
Long-term Pay Day Loan interest issues?
This guide will help you make an affordability complaint.
Pay Day Loan Distress?
Faced with unreasonable debt?
This guide will help you make an affordability complaint.
Recent Posts on this Topic...
What my readers say...
“Thanks to the clear and detailed information on this website, I was able to identify that my mortgage had been mis-sold. With the step-by-step guidance provided, I successfully claimed compensation that lifted a huge financial burden off my shoulders. I can't recommend this resource enough!”
Emilia GardinerDebt Advice Guy Reader 
“After reading the section on overdraft mis-selling, I realized I’d been charged excessive fees for years. The advice here helped me file a formal complaint, and I received a significant refund from my bank. The process was much simpler thanks to this site!”
Ewan ReyesDebt Advice Guy Reader 
“This website opened my eyes to the unfair terms hidden in my PCP car loan. With their advice, I was able to challenge my lender and reduce my balloon payment. I feel empowered and more financially secure now—thank you!”
Darlene KleinDebt Advice Guy Reader 
Where you forced to take out additional loans due to irresponsible lending?
How much interest are you paying?
Please remember there may also have been fees added to the finance too.
There are three less common debt solutions to consider. Full & Final Settlements are ideal if you’ve been on a Debt Management Plan (DMP) or unable to make payments for some time and now have access to a lump sum to negotiate settlements. Write-off debts are usually only an option in exceptional circumstances, as creditors rarely agree to this. Administration Orders, once more common, are now extremely rare, with only 16 issued in England and Wales in September 2016.
Find the potential cost of your PCP finance
£
**Note: For exceeding 120 no. of payments, a group of 12 payments will be combined into a single payment number for better chart visibility.
| Period | Payment | Interest | Balance |
|---|
Calculator Disclaimer
The repayment amount shown using this calculator is an estimate, based on information you have provided. It is provided for illustrative purposes only and actual repayment amounts may vary. To find out actual repayment amounts, contact us. This calculation does not constitute a quote, claim approval, agreement or advice by Financial Claims Experts. It does not take into account your personal or financial circumstances.
✔ How this forum works
How this forum works
It’s important you are clear on the purpose and limitations of this site. We’re an information sharing website, aiming to help people who may have been mis-sold financial products. We base our information on over 20 years of experience in financial services and claims sectors, but we can’t guarantee our insights are perfect for everyone. So do note you use the information at your own risk and we can’t accept liability for the outcome of your actions.
- The information contained within this forum/website does NOT constitute financial advice as we are not authorised/regulated by the FCA and we cannot be held responsible for any acts or omissions.
- This is our personal forum/website and the views on here are our personal views on the claiming industry.
- We do not make any money from this forum/website and the information contained within it is to help you to navigate the claiming and complaints industry.
- We often link to other websites, but we can’t be responsible for their content
- Always remember anyone can post on the Mis-sold Financial Experts forums, so it can be very different from our opinion.