Money Advice, Debt Advice & Debt Help
Can you add debt to an existing IVA?
Money Advice, Debt Advice & Debt Help

Can you add debt to an existing IVA?

Can you add debt to an existing IVA?

After starting an IVA you may need to add an additional debt. Perhaps one was forgotten or you have incurred new debt. This may be possible but not always.

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Can Forgotten Debts be added to an existing IVA?

If you forget to include a debt in your IVA it may be possible to add it later. If the debt is less than 10% of the total already included your Insolvency Practitioner (IP) should simply be able to add it.

However if the forgotten debt is larger than 10% a formal variation of the Arrangement will be required. The original creditors must accept the change.

They may not be happy to do so as it is likely to mean the amount they expect to be repaid will fall. If the variation is rejected the new debt cannot be added. You will then have to make other arrangements to pay it.

If a new debt is successfully added to your existing IVA you must expect that the Arrangement will be extended. This will normally be by 12 months.

Can you add a brand New Debt to an existing IVA?

It is possible for a brand new debt to appear during your IVA. One example of this could be a mortgage shortfall after a home repossession. Another is if you had a financial emergency and took a payday loan.

However the problem you then have is paying both your IVA and the new debt will be extremely difficult. You must therefore speak to your IP to see if it can be added to the Arrangement.

IVA Companies can often be reluctant to add new debts to an existing IVA. Even though you may be faced with having to fail the Arrangement because you cannot maintain the payments they may still be unprepared to help you.

If a new debt cannot be added to your IVA you need to consider your options. It might be sensible to to allow let your current Arrangement fail and start a new one or use a different solution.

How to find out who you owe money to

Given that a new debt cannot easily be added to an existing IVA it is important to remember and list everyone you owe money to before you start your application.

However this can be difficult. If your accounts have been passed between debt collectors or sold to a debt purchaser you may no longer know who is owed what.

One place that you can find a list of the debts you owe is your credit file. You should get a copy of your file and go through it. This should give you a good idea of who you owe money to and how much.

Your credit file is not a fool proof list of your creditors. However if you get a copy from two of the main credit agencies and compare them you should get a pretty good idea.

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6 thoughts on “Can you add debt to an existing IVA?

  1. Mania says:

    When you add creditors to an existing iva can they still issue an attachement of earnings against you?

    1. Hi Mania

      If you are already in an IVA you may be able to add a new debt to the Arrangement. However it will depend on how much it is for and why it has been incurred. Your IVA company will decide whether it can be added or not.

      If the debt can be added then the IVA protects you from the new creditor in the same way as it protects you from all the others. In other words the creditor cannot then take any further legal action against you to recover their debt. As such once it is added the new creditor is not allowed to apply for an Attachment of Earnings against you.

  2. Hannah says:

    Hi

    I took credit cards out for my mother who couldn’t get them. She has now lost her job leaving me to pay them as their in my name. I already have an IVA in place and am struggling to maintain the payments. Can these debts be added? What are the options?

    1. Hi Hannah

      In theory new debt like this can be included in your agreement. As discussed in the article above if the total of the new debt is more than 10% of the debt originally in your IVA your company would have to go to your creditors to ask them to accept a variation. Normally the catch will be that the length of your IVA will be extended by 12 months.

      That said your IVA company do not have to help you. If they refuse or make make stipulations which you cannot agree to then you have the option of letting the original agreement with them fail. You could then begin a new IVA with a different IVA company which includes all your debt. Alternatively you could stop you IVA and use a different solution such as bankruptcy.

  3. Karen says:

    Can I add a credit card to my Iva I forgot to put it in

    1. Hi Karen

      Generally speaking if you forget to add a debt to your IVA it can be added later. However how easy this is to do will depend on how much this debt is compared to the total already in the IVA.

      If the amount of the new debt is 10% or less of the total already in the Arrangement your IVA company should be able to add it without referring to the creditors. If it is greater than 10% the only way it can be added is by proposing a formal variation which the creditors will need to accept.

      If the debt is added you must expect to give something in return. This will normally involve extending your payments for another 12 months. The extra you pay goes towards compensating the original creditors who would otherwise be paid less overall than they originally agreed.

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