Which debts can be included in an IVA?

Which debts can you pay off with an IVA?

IVA Debt – you can use an IVA to help pay off many debts, such as:

  • overdrafts
  • personal loans
  • catalogue debts
  • Council Tax arrears
  • hire purchase debts
  • credit and store cards
  • Income tax
  • National Insurance

Unsecured debts – debts which aren’t secured against an asset like your property – can be included in an IVA. 

IVA Debt – which debts can’t you pay off with an IVA?

You can’t use an IVA to pay off:

  • maintenance payments ordered by a court
  • child support payments
  • magistrates’ court fines
  • student loans
  • TV licence payments

Secured debts can’t be included in an IVA, but they are given special priority within your IVA budget, to help make sure you can keep to your agreement. You choose which creditors are included in your IVA. If you don’t include a company you owe money to, they won’t be part of the IVA or bound by it, you’ll still have to pay them in full.

Can secured loans be included in an individual voluntary arrangement (IVA)?

Secured loans, such as mortgages secured against your property, can be included in an IVA but the creditor is unlikely to agree to include it. This is because the terms of the loan can’t be changed without their consent, and the debt owed to the secured creditor is likely to be fully secured. So they’re unlikely to consent to any change in the terms of the loan and accept a reduced amount.

Can joint debts be included in an individual voluntary arrangement (IVA)?

IVAs were introduced by the Insolvency Act 1986 which allows joint debts to be included in an IVA, but it can get a little complicated. As two people are liable for a joint debt, if the other person isn’t subject to an IVA, the creditor can still take legal action against them for the debt. The circumstances could vary depending on whether the people are jointly or individually liable for the debt.

 

Learn more about IVAs and whether you qualify.
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