The Write-Off, Question by Question
How much you could clear, how it is worked out, and the honest caveats.
How much debt is written off in an IVA?
There is no fixed amount. How much is written off depends entirely on how much you owe and what you can afford to pay over the five to six year term. The rest, the part you cannot realistically repay, is written off at the end. For a typical case this often works out at somewhere around 50% to 60% of the debt, but it varies widely from person to person.
What does ‘up to 80%’ in adverts really mean?
Treat those figures with caution. You may see adverts promising to write off ‘up to 80%’ or even ‘90%’ of your debt. These are best-case outcomes, not what most people get, and debt charities warn that write-offs that high are uncommon. The honest answer is that it depends on your circumstances, and a realistic figure usually sits well below the headline numbers in adverts.
How is the write-off amount actually worked out?
It is simple arithmetic, not a percentage chosen in advance. Your Insolvency Practitioner works out what you can afford each month after essential living costs, multiplies that across the term, and that is roughly what your creditors receive, with interest and charges frozen. Whatever is left of the original debt at the end is written off. So the more you can afford to pay, the less is written off.
Will I definitely have debt written off?
Only if you complete the IVA. The write-off happens at the very end, once you have made all your payments and the arrangement finishes successfully. If the IVA fails partway through, for example because payments stop, the debts are not written off, you may owe the full balance again, and any fees already taken are not refunded. That is why the payment has to be one you can genuinely sustain.
Does owing more mean more is written off?
Not directly. What matters is the gap between what you owe and what you can afford to pay over the term. Someone with a large debt but a modest income may have a lot written off, while someone with a smaller debt and more spare income may repay most of it. It is the relationship between the two, not the headline debt, that decides how much is cleared.
When is the debt actually written off?
At the end of the IVA, when you receive your completion certificate. Up to that point the debt still technically exists; it is frozen and protected, but not yet cleared. Once you have made your final payment and the practitioner confirms completion, the remaining qualifying balance is legally written off and you are free of it.
Are there debts that will not be written off?
Yes. An IVA only writes off the unsecured debts included in it. Some debts cannot be included and survive the arrangement, such as mortgages and secured loans, student loans, court fines, child maintenance and certain HMRC debts. Any new debt you take on during the IVA is not covered either, so not everything you owe will necessarily be written off.
What if I come into money during the IVA?
Windfalls usually go towards your debts, which reduces how much is written off. If you receive an inheritance, a bonus or another lump sum during the IVA, it normally has to be paid in. If it is large enough you may end up repaying your debts in full, in which case little or nothing is written off, but you also finish the arrangement. Your practitioner will explain how windfalls are treated.
How can I get a realistic estimate?
An IVA calculator can give you a rough idea, but treat it as a starting point, not a promise. The only way to know what would really be written off is a proper assessment of your income, spending and debts by a licensed Insolvency Practitioner or a free adviser. They can give you an honest figure, and tell you if a cheaper route would leave you better off.
