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The changes to the IVA protocol bring further clarity and certainty for both consumers and creditors.
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Research published in October 2024, showed concerning evidence of poor practice by some providers.
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The revised protocol comes into effect from 1 June 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:
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Clearer guidance for when an IVA is not suitable, for example, if a consumer qualifies for a Debt Relief Order.
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The consumer’s family home will no longer form part of their IVA if the providers and creditors follow the protocol.
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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.
