IVAs and Trust Deeds: A simple glossary

When you’re going through a debt solution, there can be a lot of confusing words and phrases to get your head around. Here are some of the terms you may encounter.

The debt solutions

IVA (Individual Voluntary Arrangement) 

In England, Wales, and Northern Ireland, an IVA  is the formal, legally binding agreement between you and the people you owe money to. You make one affordable monthly payment (usually over 5 years) and any remaining debt within the IVA is written off at the end. There are certain debts such as TV license arrears, student loans, or child support arrears that cannot be included in an IVA and will continue to need to be paid. The full list is available from Citizens Advice. 

Trust Deed 

In Scotland, a Trust Deed is a voluntary agreement between you and the people you owe money to (also called your creditors). You agree to pay a regular amount of money towards your debts and at the end of a fixed time (usually over 4 years) the rest of your debts included in the Trust Deed will be written off. Certain debts such as student loans or court debts can be included in a Trust Deed but will not be written off at the end of the process. The full list is available from the Scottish Government. 

The people involved

Insolvency Practitioner (IP) 

A licensed professional who's legally allowed to set up and oversee your IVA or Trust Deed. Every arrangement needs one.

Nominee 

The IP's role before your arrangement is approved. They put the proposal together and present it to your creditors.

Supervisor

The IP's role after your arrangement is approved. They oversee your payments and make sure everything runs to plan until completion.

Trustee 

In a Scottish Trust Deed, the Trustee is the person who administers and oversees the arrangement.

Creditor 

Anyone you owe money to, like a lender, credit card provider, etc.

Debtor 

The person who owes the money. It’s how you may be referred to in letters, contracts and other documents during the process.

The paperwork and process

Statement of Affairs

A full snapshot of your finances: income, outgoings, assets and debts that forms the basis of your proposal to creditors.

Creditors' Meeting 

The point where your creditors vote on whether to accept your proposed arrangement. 

IVA Protocol 

A standard set of terms that most IVAs follow, updated periodically. If your IVA was set up under an earlier version, some terms and conditions may differ slightly from someone whose IVA started more recently. It’s worth checking which one applies to you.

Modification 

A change to the terms of an already-agreed arrangement, requiring creditor approval, for example, if your circumstances change partway through.

Moratorium 

In Scotland, a moratorium is a temporary freeze on creditors taking further action against you while your arrangement is being set up. You must apply for the moratorium while you’re considering which debt solution is right for you.

Full and Final Settlement 

A lump sum offer to close out your arrangement early for less than the total owed, if the creditors agree.

Breach 

Missing agreed payments or terms without agreement from your Supervisor. This puts your arrangement at risk of failing.

Completion Certificate 

The IVA document confirming you've met all the terms of your arrangement; your official proof it's finished.

Discharge 

In Scotland, the point at which your remaining qualifying debts are legally written off and the arrangement ends.

Money and property terms

Secured debt 

Debt tied to an asset, like a mortgage secured against your home. If you don’t keep up with the repayments, the lender may be able to take the asset to recover the money you owe. Because of this, secured debts usually aren’t included in an IVA unless the lender agrees.

Unsecured debt 

Debt not tied to an asset, like credit cards, personal loans or overdrafts. This is what IVAs and Trust Deeds typically deal with.

Property Clause / Equity Release 

A common IVA term may require homeowners to try to release equity from their property (e.g. via remortgaging) near the end of the arrangement, to put extra money towards their debts.

Land Registry Restriction 

A note placed on your property's title while you're in an IVA, flagging the arrangement to anyone dealing with the property. This should be removed once your IVA completes. It's worth checking if it's actually been done.

Payment Holiday 

An agreed, temporary pause in your monthly payments, usually to support in hardship — it doesn't extend the arrangement unless agreed.

When the IVA or Trust Deed completes 

Credit File / Credit Report 

Your financial track record, held by credit reference agencies. An IVA or Trust Deed is recorded here for six years from the start date, which affects your ability to get credit during and for a period after your debt solution ends.

Rebuilding credit 

Building newer, positive information in your credit history after your arrangement ends. This can take time, but there are steps you can take at your own pace. When you’re ready, Loqbox can help you build your credit history too.