Key points at a glance
- In an IVA you make affordable payments for an agreed term — usually five to six years — and any qualifying debt you haven't repaid by the end is written off.
- There is no fixed percentage. How much is written off depends on what you can afford, the size of your debts and what your creditors agree to.
- Be cautious of anyone promising a specific write-off figure before reviewing your finances — a genuine answer needs a proper assessment.
- Only certain debts can be included; some, such as secured loans, can't be written off this way.
How does write-off work in an IVA?
An IVA (Individual Voluntary Arrangement) is a formal agreement, supervised by a licensed Insolvency Practitioner, where you repay what you can realistically afford over a set period — typically five to six years. You make one affordable monthly payment, which is shared between the creditors included in the arrangement.
At the end of the term, provided you've kept to the agreement, the arrangement completes. Any qualifying debt that remains unpaid at that point is written off, and those creditors can't pursue you for it afterwards. That write-off at the end is the feature people most associate with an IVA.
Why there's no fixed percentage
You'll see lots of bold figures online — claims that an IVA writes off a set proportion of your debt. We deliberately don't quote a percentage, and here's why: it isn't true for everyone, and it can't be.
An IVA is built around your affordability, not a formula. Two people with the same total debt can end up writing off very different amounts, because their incomes, essential outgoings and assets differ. Someone who can afford more each month will repay more of their debt; someone who can afford less will repay less. The write-off is simply whatever qualifying balance is left at the end.
If a company promises you a specific write-off percentage before looking at your finances, treat it with care. A responsible answer always starts with an assessment of your individual situation.
What affects how much is written off?
The amount of qualifying debt written off at the end of an IVA depends on a handful of factors:
- What you can afford monthly. Your contribution is based on your disposable income after essential living costs.
- How long the IVA runs. Terms are commonly five years, sometimes six — for example if you don't have property equity to contribute.
- Your total qualifying debt. The larger the balance relative to what you can repay, the more is typically left to write off.
- Assets and equity. If you own a home with equity, you may be asked to try to release some of it towards the arrangement, which affects the overall picture.
- What your creditors agree to. An IVA only goes ahead if creditors holding the required majority vote to accept the proposal.
Which debts can be written off in an IVA?
An IVA deals with unsecured debts. Those that can usually be included — and so written off if unpaid at the end — include:
- Credit cards and store cards
- Personal loans and payday loans
- Overdrafts
- Catalogue and mail-order debt
- Council tax arrears (the amount already owed)
- Some HMRC debts and benefit overpayments, depending on circumstances
Debts that generally can't be included or written off in an IVA include your mortgage and other secured loans, court fines, and (in most cases) student loans and child maintenance arrears. These would still need to be dealt with separately.
Because secured debts can't be written off this way, an IVA isn't about clearing every debt you have — it's about making the unsecured debts you can't afford manageable, and writing off what's left of those qualifying balances at the end.
What happens at the end of an IVA?
When you reach the end of the agreed term and have met your obligations, your Insolvency Practitioner issues a completion certificate. At that point:
- Any remaining qualifying debt in the arrangement is written off.
- Included creditors can no longer pursue you for those balances.
- The IVA stays on your credit file for a period (commonly six years from the start date), after which it drops off.
It's worth knowing that things can change during an IVA — for example if your circumstances shift, or if payments aren't maintained. Our guide on what happens if an IVA fails and whether you can have more than one covers that in detail.
Want a realistic figure for your situation?
We'll look at your actual debts, income and outgoings and explain what an IVA could mean for you — honestly, free of charge, with no obligation.
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An IVA can be a powerful way to deal with unaffordable debt, but it's a serious, formal arrangement that affects your credit rating and isn't right for everyone. The amount written off is the result of a careful, individual assessment — not a marketing number.
For free and impartial information, MoneyHelper and StepChange are excellent starting points. And whenever you're ready, you can talk to us — we'll give you a straight answer about whether an IVA fits.