Do I have to include all my debts in an IVA ?

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To answer your confusion, yes. When you enter an IVA, you must include most of your debts, primarily unsecured debts. However, Do I have to include all my debts in an IVA. IVA advice will be there to help you throughout the IVA set up and processing. Whatever debts you have in an IVA, all the outstanding debt balances will be written off by the creditor when the IVA tenure ends.

When you look for debt advice, there is a good chance that you will be recommended to go for Individual Voluntary Arrangement (IVA) to solve your debt affairs. While you can include almost every kind of debt in your IVA since there is no specified limit, there remain some exceptions to the IVA debts. 

For the unversed, an Individual Voluntary Arrangement or IVA is a legal and formally binding contract between the debtor (you) and all of your creditors to repay your debt amount over a specific duration. An official IVA is processed and set up by a designated Insolvency Practitioner (IP), who also acts on your behalf as a Trustee and a Nominee. IVAs are flexible, but it is expensive debt solution. So, before you consider IVA, do take the necessary debt help. 

Debts you can include in an IVA.

If you enter into an IVA, you have to include all of your available unsecured debts. One good piece of debt advice is to talk with your unsecured creditors if they want to include it in an IVA. Because once the IVA is set up and is in motion, all your disposable income will go in as monthly contributions towards IVA payments. If any debt is left out of the IVA agreement, you won’t have additional money to spare for those debts. 

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During the IVA proposal, your IVA administrator, the Insolvency Practitioner, will give all the necessary IVA advice, including which debt you can or cannot include in an IVA. Nonetheless, obligations that you can include in an IVA are as below:

  • All your unsecured debts include credit unions, overdrafts, doorstep loans, credit cards, unsecured loans, personal loans, store cards, payday loans, catalogs, and charge cards.
  • Other unsecured debts with an attachment of earnings or CCJ (County Court Judgement) in place.
  • Utility supply arrears from previous properties or suppliers such as water bills, gas, and electricity bill. 
  • Service provider arrears from previous properties or suppliers, including landline bills, digital TV charges, and mobile phone bills.
  • Previously secured debts against an asset repossessed due to shortfall on Hire Purchase and properties. 
  • Council tax arrears (previous year and present year, if any)
  • National Insurance arrears
  • Customs VAT and HM Revenue
  • Self-assessed tax
  • PAYE
  • Any outstanding bills, including veterinary bills, solicitor’s costs, building work invoices, etc. 
  • Debts to friends and family. 

Can you include joint debts in an Individual Voluntary Arrangement (IVA)?

For any confusion regarding the debts, you can freely ask for IVA advice from your IVA administrator, the IP. As you are already aware, a joint debt is formed only with a mutual agreement from two different individuals. 

So, can you include a joint debt in an IVA? Yes. You can include a joint debt in an IVA. However, the other individual involved in the joint debt will have to make their part of the debt payment. The other person is still liable for the debt under his agreement. Debt advice will be there to help with the joint debt issue. 

As you have included joint debt in an IVA, the creditors will write off any outstanding debt amount you are responsible for after the IVA is over. But the other person in the joint debt has to continue repaying his part of the debt money. Since the other person might feel disadvantaged at that moment, you should seek IVA advice for any joint debt issue. 

IVA is only for individual agreements. So, entering joint names in an IVA is not possible. But what you can do is to get in an “inter-locking IVA.” In this type of IVA, joint payments are possible. You can even include joint debts in the respective individual agreements and make a joint monthly IVA contribution. 

Debts you cannot include in an IVA.

Even though IVA did not propose a debt inclusion list, some exceptions exist. You cannot include debts like priority debts and arrears in an IVA. An IVA help will clear all your IVA issues. For instance, if the priority debts are not included in an IVA, how will you repay them! The debt advice will ask you to factor these debts into your monthly household expense allowance. 

Priority debts not included in an IVA are:

  •  Court fines
  • Court maintenance arrears
  • Current utility bills
  • Current service providers bill
  • Student loans
  • Secured loans and mortgages
  • Hire Purchase payments
  • Child maintenance arrears
  • Rent charges
  • Property service charges
  • Current year council tax (not in arrears)
  • Social fund loans

Why secured loans, rent, and mortgages are not included in an IVA?

Secured loans are priority debts secured against your property, car, or other assets. This indicates that if you cannot repay the secured loan, the authorized personnel can take your secured asset or mortgage from you. 

If you want to include secured loans, rent arrears, and mortgages in an IVA, look for IVA advice. Then, please discuss with your secured creditors for their permission to include them in an IVA. While there is no such debts exclusion in an IVA, the possibility to include secured loans and mortgages in an IVA is unlikely. 

Last thoughts

Debt advice suggests that you Do I have to include all my debts in an IVA in an IVA proposal. There is also no limit on the amount of debt you can include. However, if your total debt value is more than £10,000, then an Individual Voluntary Arrangement (IVA) is your best debt solution. For a total debt value of less than £10,000, you should consider other debt options by consulting with debt help. Also, make sure that you have more than one creditor.