If you're struggling with debt, you’ve likely come across the term IVA, or Individual Voluntary Arrangement. While it’s a legitimate and often life-changing debt solution, there’s a lot of confusion and misinformation out there. From concerns about losing your home to myths about your credit being ruined forever, it’s easy to feel overwhelmed or misled.


At Step Away Debt, we believe that the right information can change lives. In this blog, we’re setting the record straight by debunking 7 of the most common myths about IVAs, so you can make an informed decision about your financial future.

Myth 1: An IVA Means You’ll Lose Everything You Own

Debunked:
This is one of the most common misconceptions. An IVA is designed to help you keep control of your finances, not strip you of your assets. In most cases, you can keep your home, car, and essential belongings. As long as you're making the agreed monthly payments, your possessions are usually safe.

Myth 2: Only People with Massive Debt Can Get an IVA

Debunked:
While IVAs are often used by people with higher levels of unsecured debt, there’s no fixed threshold. If you owe over £6,000 to two or more creditors, an IVA might be a suitable option. What matters most is whether the IVA can provide a realistic and sustainable repayment plan based on your income and circumstances.

Myth 3: An IVA Will Wipe All Your Debts Instantly

Debunked:
An IVA is not a magic fix. It’s a formal agreement to repay a portion of your debts over a set period, usually 5 to 6 years. At the end of that period, any remaining unsecured debt covered by the IVA is written off. But it does require commitment, budgeting, and cooperation.

Myth 4: Your Credit Rating Will Be Ruined Forever

Debunked:
An IVA does impact your credit score and stays on your credit file for six years from the start date. However, that doesn't mean your credit is permanently damaged. Many people begin rebuilding their credit history as soon as their IVA ends, often with better money management skills than before.

Myth 5: You can’t apply for an IVA If You’re Employed or a Homeowner

Debunked:
Absolutely not true. IVAs are available to both employed and self-employed individuals. Being a homeowner does add some complexity, particularly when it comes to equity, but it doesn’t disqualify you. Many homeowners choose an IVA to avoid bankruptcy and keep their home protected.

Myth 6: All of Your Debts Are Included in an IVA

Debunked:
While many unsecured debts (like credit cards, overdrafts, and personal loans) are covered in an IVA, not all debts qualify. Secured debts (like mortgages), student loans, and court fines are typically excluded. It's important to get proper advice so you know exactly what will be included.

Myth 7: You Have to Deal with Creditors Yourself

Debunked:
One of the major benefits of an IVA is that once it's in place, your insolvency practitioner handles communication with your creditors. No more threatening letters or stressful phone calls—you’ll make one monthly payment, and we'll take care of the rest.

Conclusion

An IVA can be a powerful way to regain control over your finances—but only if you understand the facts. Don’t let common myths and misunderstandings stop you from exploring a real solution. At Step Away Debt, our team of debt specialists is here to provide honest, regulated advice and walk you through every step of the process.

Ready to explore your options with clarity and confidence?

Contact us today or visit www.stepawaydebt.com for a free, confidential consultation.