Can I Pay Off My IVA Early?

In your credit report, an IVA, or an Individual Voluntary Arrangement, can negatively affect your credit standing with many banking and loaning institutions. The good news is you settle your IVA early with early payments if you want!

Your financial circumstances may change throughout your IVA, and you may find yourself in a position where you may increase your monthly payments or even pay off all of your outstanding obligations to all of your creditors at once.

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Though settling your IVA payments with a series of early monthly payments sounds like an ideal solution, there are still some things you have to consider to make sure that this is the best debt solution for you.

This article will look through the various options you have to pay off your IVA earlier than the previously set schedule. Given your current financial circumstances, we will also discuss the benefits of settling your debts early and if early payment is the way to go.

What is an IVA?

An IVA may be a new concept for many people who have never availed of it before.

An individual voluntary arrangement is a written and legally enforceable agreement between you and your creditors to repay your obligations over a period of time (IVA). This implies the court has authorised it, and your creditors must follow it.

An IVA may be tailored to your specific requirements, but it can be costly and considered dangerous.

A qualified individual, known as an insolvency practitioner, must set up an IVA. A lawyer or an accountant will be the person in charge of this. The insolvency practitioner will charge the IVA. These are frequently high and are calculated depending on the amount you repay through the IVA. Throughout the IVA, your creditors are dealt with by the insolvency practitioner.

How do I pay off my IVA off early?

After you have decided to pay your IVA off early, the first thing to do is to notify your Insolvency Practitioner to express your intention to settle through a Full and Final IVA Settlement. The representative from the insolvency practitioners association you work with will assess your offer and determine how likely your creditors will accept it. Then, they will call a Variation Meeting to discuss any modifications to your IVA. If they think it will be enough for the creditors to approve.

You must have a compelling cause for wishing to exit your IVA early as part of your proposal, and you must explain this to your creditors. You also need to make sure your offer is accepted, and you need to show how you came along with the money to pay for it – if it is something they are already entitled to, they will just take the money and keep the monthly payments in place.

Finally, you must demonstrate that you will not face financial difficulties by paying it off early. If you borrow money to pay off your IVA, but you end yourself in a situation where you can’t afford the additional debt, you are back to square one, and your solution is likely to be rejected.

What is a Full and Final IVA Settlement?

The best option to fully pay for your IVA is through a Full and Final Settlement. Only a chosen few who have access to a lump sum of money but don’t have enough ongoing disposable income to make monthly payments can get a full and final settlement. In some instances, a one-time lump sum payment may be seen as more beneficial to both the debtor and the creditor than a debt repayment plan with low monthly instalments that would take too long to repay.

Retirement and redundancy is an example of a situation where a lump sum IVA can be conceivable, as the individual utilises redundancy pay to pay off debts before retiring.

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If you become aware that you will be receiving money, you should contact a debt management business. They will tell you if the money you have is sufficient for your creditors to consider, and they will assist you in putting together the plan for your full and final IVA.

If you submit a lump-sum IVA, your creditors will analyse it and compare the financial return from bankruptcy to the requested IVA payment.

The amount you may give lenders does not equal the entire balance due. If you are not currently in an IVA but are considering one, we recommend making the greatest offer you can to your creditors so that your IVA has the highest chance of being accepted. If you’re already in an IVA and want to offer a lump payment, talk to your supervisor first.

Is a Full and Final IVA Settlement Worth It?

A Full and Final Settlement offer is definitely worth taking if you are thinking, “What is a convenient way to settle my IVA early.” However, it is still best to think things through and review all of the things you need to consider when making this decision.


  • Paying early means you will no longer be constrained by the numerous financial restrictions of an IVA, such as a maximum loan amount or the need to obtain your insolvency practitioner’s permission before engaging in certain financial activities.
  • Even if you don’t acquire the necessary clearance to pay off your IVA early, you’ll still be able to make a monthly payment as you have been.
  • You can start restoring your credit score sooner. Because the restrictions of an IVA won’t bind you, rebuilding your credit profile may be a little easier.
  • Certain changes, such as your ability to obtain a mortgage, will vastly increase after you are free of an IVA.


  • Whether you pay off the IVA early or not, it will remain on your credit report for at least six years after it first becomes active.
  • Even if you have worked hard to settle the agreement early, lenders may still be wary of you if the IVA is still on your credit report.
  • Another challenge you may encounter is the inability to obtain lump-sum loans. So, if you’re hoping to pay off your loan early to boost your chances of acquiring a lump sum loan, it might not work out.

When to consider a full and final IVA

A full and final IVA is a great way to help you recover the status of your credit file through a lump sum payment. However, a full and final IVA may not always be the debt solution to choose, depending on your current status.

Here are some of the instances when you should consider going for a full and final IVA.


When drafting an IVA, your insolvency practitioner will ensure that it is both inexpensive and appropriate for your situation. With a normal agreement lasting up to five years, it’s understandable that your circumstances might change throughout that period.

In some situations, you may be able to utilise your redundancy money to provide your creditors with a full and final settlement of your obligations. You need to speak with your IP about this, but if you get a significant sum that covers the majority of your obligations, you could be able to persuade your creditors to settle the deal sooner than expected. If you’re unemployed and having trouble finding work, or if you are nearing retirement age, creditors may see this as a better option.

Your IVA will only be terminated early if the amount of your redundancy compensation is such that you have fully settled all of the obligations in your IVA, including the IVA costs, without any write-offs. If you believe you might be able to accomplish it, contact your IVA business and have them check the numbers.


A divorce or breakup may affect any IVAs you have in place that is shared with your spouse or your partner. Because your monthly costs may be greater, your initial IVA agreement may affect your IVA repayments. This is because instead of one set of monthly bills, there will now be two to consider.

As a result, persons divorcing with interlocking IVAs discover that they cannot keep the original arrangement they established. The IVA may need to be terminated and a new debt solution negotiated for each individual.

Just because you’ve broken up with your lover doesn’t mean your IVA is over. It also doesn’t mean you’ll be free of any obligations you made to your partner’s debts or joint funds when you first agreed to an IVA.


The receipt of a personal injury settlement would appear to be payable to the creditor. If the settlement amount exceeds the amount payable under the IVA, the surplus monies will be given to the person who received the settlement.

In this case, any extra cash might be put into a Personal Injury Trust to secure the individual’s claim to any means-tested benefits they might be eligible for.


If you have had an illness in the past that has impacted your income, but you are now in a situation where you can afford to pay your bills, your IP may include facts about what happened in your IVA petition. Your creditors will review and vote on your plan, and if you have had any cause, such as sickness, that has put you in the financial condition you are in now, this may encourage creditors to regard your request favourably.

Reduced Hours at Work

If you are not sure if an IVA will affect your career, check with your boss and review your employment contract as well as the rules of any professional affiliations you may have.

If your financial circumstances change – for example, if you suddenly have reduced hours at work – you may be entitled to seek a payment break of up to 9 months or ask your creditors to suspend your monthly IVA payments until you find another work, depending on the conditions of your IVA.

IVAs may be pretty flexible, but it is critical to notify your supervisor of any changes in circumstances as soon as possible so that they can discuss your alternatives with you.

What happens once I’ve paid off my IVA?

You will be debt-free after what may have seemed like an eternity. Once your IVA is over, and your IP has completed the last payment, you will be able to relax and enjoy life knowing that you are no longer in debt. You should also discover that you have some extra income to spend on yourself after a few years of living on a budget. First and foremost, savour the moment and rejoice in the alleviation.

As your IVA draws close, there is not much more for you to complete. Your IP will verify that all payments have been paid on time and in full, and you will then be able to finish the process by making your last payment.

You will receive an IVA completion certificate once all of the data has been checked and authorised, certifying that your IVA has been completed and your debts have been cleared.

Because your IVA is a kind of insolvency, your credit file may have been negatively damaged, resulting in a poor credit score. Remember that the IVA will still be reflected on your credit report for six years after the approval date. You can start increasing your credit score after your IVA has been removed from your credit record.

How Much Money Do I Need To Pay Off My IVA?

There are no two IVAs alike, and the amount of money required to complete the agreement will fluctuate for each person. The amount required to pay off your IVA early is dependent on the remaining balance on the contract. There is currently no way to know the exact settlement amount that your creditors will accept unless you are willing to pay them back in full because it’s up to your creditors. The greatest advice is to make an offer as near as feasible to the amount you owe.

What are you allowed to use to pay off an IVA?

It is critical to understand what finances you are authorised to spend to pay off an IVA. Given that most IVAs only require you to return a portion of your entire debt, creditors are often entitled to any windfall you obtain during the arrangement, with no change to your monthly payments. So, if you get a big bonus at work, don’t get too excited just yet: your creditors could seize it from you to pay off part of the debt that would otherwise be wiped off after your agreement.

What Happens If You’re a Home-Owner with an IVA?

If you own a home with equity, you may be required to refinance six months before your IVA expires and pay the money released into your IVA.

You will not be obliged to remortgage if your equity is less than £5,000. If you have more than £5,000 in equity and cannot remortgage, you may be required to make additional monthly payments to your IVA, extending the period by 12 months.


There are many debt solutions you can take into consideration, but the early settlement of unsecured debt through monthly repayments always looks like the best option on paper. However, though this solution seems appealing, it is still best to seek debt advice from people who can help you understand your financial obligations better.

Throughout this article, we discussed that Individual Voluntary Arrangements can be quickly settled through a lump-sum offer depending on individual financial circumstances. The lump-sum can come from a family member as inheritance money or as a settlement for injury and illness. We also discussed how an IVA affects your total debt and any remaining debt that may have not been covered.

All in all, an IVA is often times the answer to the financial trouble that many people are facing. We hope that you consider this article as free debt advice and that it encourages you to settle your IVA early.

Final Thoughts

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IVA Debt Help Information

If you want to know more about the debt help plan of an IVA we have all articles related to individual voluntary arrangements here:

Other Debt Solutions

An IVA is not the only debt solution you have and this is where speaking to a qualified debt advisor is very important.

After speaking to a debt consultant you might realise the best solutions are one of the following:

Make sure you take time to understand all the debt solutions available before making a decision because DMPs (aka debt management plans) are also a popular choice in the United Kingdom.