Understanding IVAs and PVAs: A Guide to Individual and Partnership Voluntary Arrangements
NAVIGATING DEBT SOLUTIONS IN A CHANGING FINANCIAL LANDSCAPE
In 2025, the landscape of personal and business debt recovery is evolving in response to new regulatory frameworks, shifting economic pressures, and the growing demand for accessible, structured debt solutions. For individuals and partnerships facing mounting unsecured debt, Individual Voluntary Arrangements (IVAs) and Partnership Voluntary Arrangements (PVAs) offer legally binding, court-sanctioned alternatives to bankruptcy.
These arrangements provide breathing space, allowing debtors to make realistic repayments over time while protecting themselves from aggressive creditor action. As insolvency practices modernise and the new 2025 IVA Protocol comes into force, understanding these solutions has never been more essential.
FROM OVERWHELMED TO ORGANISED: WHAT IS AN IVA?
An Individual Voluntary Arrangement (IVA) is a formal agreement between an individual and their unsecured creditors, allowing them to repay what they can afford—typically over five to six years. Once the arrangement is complete, any remaining unsecured debt is written off.
Supervised by a licensed insolvency practitioner, the IVA protects the individual from legal action, interest accrual, and creditor pressure. It is increasingly viewed as a structured alternative to bankruptcy, offering dignity, protection, and a clear route to financial rehabilitation.
Recent updates under the 2025 IVA Protocol place a strong emphasis on transparency and suitability. A newly introduced ‘key facts’ document ensures that debtors fully understand the implications of the agreement, including fees, home equity treatment, and consequences of default.
Significantly, the protocol now tailors arrangement durations to home equity levels—removing the previous requirement for remortgaging. IVAs are now more flexible and consumer-focused, helping individuals stabilise their finances without sacrificing their homes or future.
STRUCTURED SOLUTIONS FOR PARTNERSHIPS: WHAT IS A PVA?
While IVAs serve individuals, Partnership Voluntary Arrangements (PVAs) are designed for business partnerships facing financial strain. Like IVAs, PVAs are formal agreements with creditors, but they cover collective partnership debts rather than personal obligations.
A PVA allows partners to continue trading while repaying creditors under agreed terms. The process is overseen by an insolvency practitioner and requires approval from 75% (by value) of creditors. When partners also have personal liabilities linked to partnership debts, interlocking IVAs can be arranged alongside the PVA to ensure full legal protection.
Unlike company administration or dissolution, a PVA is focused on preserving the trading potential of a viable partnership, offering an opportunity to restructure without liquidation or reputational damage.
REGULATORY REFORMS SHAPING THE DEBT RELIEF LANDSCAPE
Several important developments are redefining how debt solutions operate in the UK:
The 2025 IVA Protocol:
Introduced in July 2025, the new IVA Protocol introduces greater standardisation, clarity, and oversight. Key changes include:
A clearer eligibility threshold, discouraging IVAs where debts are under £7,000 or where alternatives like Debt Relief Orders are more appropriate.
Home equity is no longer automatically expected to be released through remortgage. Instead, if equity exceeds £10,000, the term extends to six years; otherwise, it remains at five.
Practitioners can now approve payment holidays or reductions up to 20% without convening a creditor meeting—streamlining adjustments for those in difficulty.
Clear signposting to regulated debt advice services is now required if an IVA fails, improving support and reducing the risk of financial exclusion.
These changes are designed to safeguard consumers from inappropriate advice, improve outcomes, and make IVAs more resilient and accessible.
THE STABILITY OF THE PVA FRAMEWORK
While there have been no major legislative changes to PVAs in 2025, their relevance remains strong—especially in sectors where traditional business models are under strain. Insolvency practitioners are increasingly incorporating PVAs into wider restructuring strategies, often paired with operational reforms and partner-specific IVAs.
CHOOSING THE RIGHT STRUCTURE FOR YOUR SITUATION
Understanding whether an IVA or PVA is right for you depends on your financial structure and long-term goals.
An IVA may be suitable if you:
Have multiple unsecured debts and a stable income.
Need a structured, court-approved way to manage repayments.
Want to avoid the reputational and legal consequences of bankruptcy.
A PVA may be appropriate if:
You are part of a trading partnership experiencing cash flow pressure.
The partnership is viable but needs breathing space to restructure.
You and your partners are willing to commit to joint debt repayment and may also need interlocking IVAs for personal liabilities.
Both solutions offer legal protection, the opportunity to negotiate with creditors on equal terms, and a structured pathway out of financial difficulty.
A STRATEGIC APPROACH TO PERSONAL AND PARTNERSHIP RECOVERY
Debt can feel isolating—but with the right strategy, it doesn't have to be the end of the road. The evolution of IVAs and PVAs in 2025 demonstrates a clear shift towards transparency, fairness, and sustainability. Whether you're an individual facing credit card arrears or part of a partnership under strain, these voluntary arrangements can provide an effective lifeline.
At Voscap, we support individuals and business owners in identifying the right restructuring tools for their situation. If you're considering an IVA or PVA—or are unsure where to start—reach out today to explore your options.
For confidential advice, contact Voscap on 020 7769 6831 or email help@voscap.co.uk.
ABOUT VOSCAP
Voscap’s primary objective is to save your business. Our team of experts’ knowledge in restructuring and turnaround assignments is invaluable when assessing the best option available to your needs. With experience spanning several decades, we have the skill and resources to provide viable solutions within all industry sectors. All organisations go through difficult times and we are here to help. From small to multi-million turnover businesses, we have dealt with the most complex of cases. We offer an initial free assessment in analysing your financial position and providing clear and precise advice making your experience a simple non-complicated process.