To enter into an IVA, you must be personally insolvent. This is a requirement of the 1986 Insolvency Act. Obtain advice from an Insolvency Practitioner (IP) who will be able to confirm to you whether you are insolvent or solvent.
If you are indeed insolvent you should investigate and consider the full range of financial solutions available. You will be able to obtain advice on each of these solutions from your IP. The IP will explore with you all of the possible financial solutions. The three main options available to you are Bankruptcy, Debt Management or an Individual Voluntary Arrangement (IVA). If you decide to offer an IVA to your creditors, your IP will insist that you immediately stop using all forms of credit including credit cards, while your IVA proposal is being prepared. The usual advice is to cut up all your credit cards or otherwise destroy them.
If your IVA is approved by your creditors, you will not be permitted to obtain any new credit cards during the term of your IVA, which is usually for five years. Any breach of this requirement will almost certainly lead to the failure of your IVA. The exception is that with the permission of your creditors and of the supervisor of your IVA, who will also be an IP, you may be permitted to obtain a limited amount of credit in regard to payment for utilities for example. However, it would be most unusual for you to obtain permission to have and use a regular credit card or store card.
On the successful completion of your IVA, you will be issued with a Certificate of Completion. This will verify that you have complied with the terms of your IVA to the satisfaction of your creditors and of your supervisor. You will bear no further liability for your unsecured debts. At this point you will be free to seek credit. You may apply for a credit card again. In your application for a credit card, you will be expected to disclose that you were in an IVA. Card providers also normally run a credit check on applicants and will confirm that you have been in an IVA. This may have a bearing on whether they decide to provide you with credit card facilities or not. On a positive note, creditors will take into account that you dealt with your financial difficulties in a responsible way by undertaking, maintaining and successfully completing an IVA.