Setting Up, Question by Question
What happens at each stage, what affects the timing, and when the clock really starts.
How long does it take to set up an IVA?
Usually a few weeks, not months. From your first conversation with a practitioner to the day your creditors vote, it commonly takes around four to eight weeks, although a straightforward case can move faster. Most of that time is spent gathering your information and drafting the proposal, then giving creditors their say. How quickly you provide documents makes the biggest difference.
What happens during setup, step by step?
There are a few clear stages. First, an adviser assesses your finances and checks an IVA is right for you. If it is, your Insolvency Practitioner drafts a formal proposal based on your income, debts and spending. That proposal is then sent to your creditors, who are given time to vote. If they approve it, the IVA begins. Each stage is quicker when your paperwork is ready.
How long do creditors get to vote?
Creditors are usually given around 14 days to consider the proposal and submit their votes, most often by post or electronically. There is a set date by which the decision is made. If creditors ask for modifications, such as a slightly higher payment, there may be a short back-and-forth before everything is finalised, which can add a little time.
What can slow the process down?
A few things. Missing or delayed documents are the most common cause, since the proposal cannot be finalised without them. More complex situations, such as being self-employed or owning a property, can take longer to assess, and if creditors request modifications that need discussing, that adds a step. Replying promptly to your practitioner is the best way to keep things moving.
Can an IVA be set up more quickly?
Yes, to a point. If you provide your documents quickly and your situation is straightforward, the whole thing can sometimes be wrapped up in two to three weeks. What cannot be skipped is the time creditors are given to vote, that part is fixed. Be cautious of anyone promising an unusually fast set-up, as a rushed proposal can store up problems later.
Am I protected from creditors while it is being set up?
Usually not until the IVA is approved. During the setup period, creditors can in principle still contact you or take action, because the binding protection only starts once they have voted the proposal through. In some cases an interim order from the court provides temporary protection beforehand, and a separate scheme called Breathing Space can pause action for 60 days while you decide.
When does my IVA officially start?
On the day it is approved by your creditors. That approval date is when the arrangement formally begins: your payments start as agreed, interest and charges are frozen, and your creditors become bound by the terms. From that point the clock starts on the five to six years the IVA will run.
Is setting up the same as how long an IVA lasts?
No, and it is worth not confusing the two. Setting up takes a matter of weeks; the IVA itself then usually runs for five to six years of payments before the remaining debt is written off. So the few weeks at the start are just the beginning of a much longer commitment. You can read more on our guide to how long an IVA lasts.
Should I rush to set one up?
No. While it is good to deal with debt promptly, an IVA is a five to six year commitment, so it is worth taking the time to be sure it is the right choice. Get free, impartial advice first, from a service like StepChange, MoneyHelper or Citizens Advice, so you go in with a clear, honest picture rather than rushing into the first option offered.
