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Debts That CAN Be Included
An IVA covers unsecured debts — debts not backed by an asset. These can typically be included:
- Credit card balances
- Personal loans (unsecured)
- Store card debts
- Bank overdrafts
- Payday loans
- Catalogue debts
- Gas, electricity and water bill arrears
- Council tax arrears
- HMRC debts (income tax, VAT, NI, PAYE)
- Outstanding sole trader business debts
- Benefit overpayments (in some cases)
Once the IVA is approved, ALL listed creditors are legally bound — even those who voted against. They cannot pursue you for outstanding balances outside the IVA.
Debts That CANNOT Be Included
You must continue to pay excluded debts normally throughout your IVA. They are not paused or written off by the arrangement.
- Secured debts — mortgage, secured loans, hire purchase
- Student loans — excluded by statute; repaid through HMRC
- Child maintenance / CSA / CMS arrears
- Court fines — magistrates' court fines, penalty charge notices
- TV Licence fines
- Criminal compensation orders
- Debts incurred through fraud
- Social fund loans
HMRC Debts
HMRC tax debts can be included in an IVA as unsecured creditors. However, HMRC can be a challenging creditor — an IP with HMRC experience is important. If HMRC holds more than 25% of your total debt, they have effective veto power over the IVA.
Priority vs Non-Priority Debts
| Debt Type | Priority? | Included in IVA? |
|---|---|---|
| Mortgage | Yes | No — secured |
| Council tax arrears | Yes | Yes |
| Utility arrears | Yes | Yes |
| Credit cards | No | Yes |
| Personal loans | No | Yes |
| Student loans | No | No — excluded by law |
| Court fines | Yes | No — cannot be included |
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