How an IVA works?
Q: How an IVA works?
Discover how an IVA works
The first step with an Individual Voluntary Arrangement (IVA) is to make your proposal and have it accepted by creditors.
Once your proposal is approved, your Insolvency Practitioner (IP) will take on the role of Supervisor for the five year period. This will involve ensuring that the monies are handled correctly and that appropriate payments (or dividends) are made to the creditors.
Bank account
A new bank account is usually set up specifically for each individual IVA. Agreed payments are made into this account on a monthly basis, via standing order or direct debit. The account is set up and controlled entirely by the IP, helping him/her to keep the funds separate from other IVAs and simplifying payments in and out. The IP will check each month that the correct amount of funds have been paid into the account. It is very important to keep up payments into the IVA once it has been approved.
Lump sum payments
If your IVA includes a lump sum payment it will be made on a specified date, for example 3-6 months after the approval of the IVA. As with regular payments, the lump sum goes to the IP and it is worth contacting your IP to discuss how the payment should be made.
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