New protocol is the result of the agency working with
organisations across the sector to improve support for people
considering an IVA.
-
The changes to the IVA protocol bring further clarity and
certainty for both consumers and creditors.
-
Research published in October 2024, showed concerning
evidence of poor practice by some providers.
-
The revised protocol comes into effect for all protocol IVAs
from 1 July 2025 and is the product of the agency working
alongside regulators, creditors, IVA providers and
charities.
The Insolvency Service has published a revised
Individual Voluntary Arrangement (IVA) protocol to improve
the service currently offered to people in debt and safeguard
them from poor practice.
IVAs are a legally binding agreement between a person who is
insolvent and their creditors.
The new protocol includes an easy-to-read ‘key facts' document
which will be given to people in debt before they sign up to an
IVA. The protocol also gives greater clarity to Insolvency
Practitioners about their responsibilities when giving advice
about IVAs.
It is the result of a collaboration between the Insolvency
Service, regulators, the trade association R3, creditors,
providers and charities following 2024 research which found poor
practice among some IVA providers.
Claire Hardgrave, the Head of Insolvency Practitioner Regulation
for the Insolvency Service said:
It is vital that people with debt problems are always given
quality advice.
At the same time, Insolvency Practitioners need access to clear
guidance in order to provide the best service
possible.
Since the publication of our report, we have been working with
regulators and have met with Insolvency Practitioners to discuss
our plans.
This protocol provides much-needed safeguards and transparency
for all concerned, ensuring there are fewer grey areas for the
practice, and that people in debt are supported from the very
start.
Marcial Boo, Chief Executive of the Insolvency Practitioners
Association, added:
It is vital that Insolvency Practitioners meet high standards
when supporting people in financial distress.
The revised IVA Protocol marks a significant improvement in the
framework for the fair, efficient administration of consumer
IVAs, including changes that the IPA, as the largest regulator
for the sector across the UK, has long been advocating
for.
We will continue to work with the Insolvency Service and others
to ensure that the new protocol is applied in practice to bring
benefit to debtors and creditors alike.
In 2024, the Insolvency Service
published research into the provision of IVAs, looking at 310
which had been both registered and terminated between 2021 and
2023, finding that 60 per cent showed evidence of poor practice
in the early stages.
The new ‘key facts' document, will be given to consumers before
they agree an IVA proposal and provides greater clarity on what
to expect. It covers key areas, including implications for
homeowners, fees charged by IVA providers, how monthly repayments
are calculated and individual credit scores.
Some of the main changes to the protocol include:
-
Clearer guidance for when an IVA is not suitable, for
example, if a consumer qualifies for a Debt Relief
Order.
-
The consumer's family home will no longer form part of their
IVA if the providers and creditors follow the protocol.
-
Where an IVA is terminated, a requirement that the supervisor
should signpost the consumer to free, regulated debt
advice.
The revised protocol is the product of the IVA standing committee
(IVASC) of which the Insolvency Service is a member alongside the
Recognised Professional Bodies (RPBs).
It involved all parties working together to agree a product which
was easier to understand and provides greater clarity and
certainty for consumers, creditors and Insolvency
Practitioners.
Across England and Wales, a total of 64,050 IVAs were registered
in 2024.
IVAs are administered by licensed Insolvency Practitioners,
usually last for between five and six years, to pay off debts
affordably monthly contributions
Anyone in problem debt should seek free, regulated debt advice
and ask about the breathing space service while they explore
possible solutions to suit their circumstances.
