Money Advice, Debt Advice & Debt Help
Can you Leave Debt Out of an IVA?
Money Advice, Debt Advice & Debt Help

Can you Leave Debt Out of an IVA?

Can you Leave Debt Out of an IVA?

Generally speaking all of your unsecured creditors have to be included in your IVA. However in certain circumstances if might be possible to leave debt out.

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Can I keep debts out of my IVA?

All of your unsecured debts must be included in an Individual Voluntary Arrangement (IVA). Can any of your unsecured debts be left out? Can you include secured debts in the Arrangement? To find out more please visit:

Do all your debts have to be included in an IVA?

If you carry out an IVA you should include all of your unsecured debts. These are things like personal loans, credit cards, CCJs and even money owed to HMRC.

Generally speaking you are not allowed to leave any of these types of creditors out. If you try to do so you are likely to run into problems. You are unlikely to have any spare cash available to keep up the repayments.

Once your IVA starts all the spare money you have each month must be paid into the agreement. There will be non left to maintain any unsecured debts that have been left out.

Secured debts such as your Mortgage or car finance agreement are not included in an IVA. Sufficient money is added to your expenses budget to enable you to keep paying these.

Is it ever possible to leave debt out of an IVA?

There are some circumstances where it might be possible to leave debt out of your IVA. If there is a specific reason why you need to maintain a line of credit you may be allowed to do so.

An example of this is if you need a credit card to pay for business expenses. Another is if you owe your employer money and including them would jeopardise your employment and ability to repay any of your debt.

The fact that you plan to leave debts out of the Arrangement and the reasons for this must be made clear in your IVA proposal. Where necessary an amount to maintain the repayments is added to your living expenses.

You will generally not be allowed to keep an unsecured debt out of your IVA unless including it would jeopardise the whole Arrangement.

Can money owed to family be left out of an IVA?

Any debt you owe to friends and family is normally unsecured. As such it can be included in your IVA. Having said that you might feel that you want to leave it out as you do not want to involve people you know.

However it can be very useful to include this type of debt in your Arrangement. If included they will have an opportunity to vote on the Proposal and help ensure it is agreed.

It is possible to leave out friends and family debt if you wish. However you must first make clear to them that you will not be able to continue paying them back the money you owe until after the Arrangement is over.

You cannot include an amount in your living expenses budget to continue paying friends and family during your IVA. Payments to them must stop until after the Arrangement is completed.

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6 thoughts on “Can you Leave Debt Out of an IVA?

  1. Lewis says:

    As a creditor I was left out of an iva so used a debt collection agency through the high court. Can they stop this action simply by adding me to the iva?

    1. Hi Lewis

      The answer here is it depends on the size of the debt you are owed. If it is small relative to all the other debt in the IVA (ie adding your debt would not increase the overall total by more than 10%) then it can be included without your consent and your action must stop.

      The rational here is that even if you had been included in the original proposal and voted against it would not have mattered. In an IVA if the majority vote yes all are legally bound. In this scenario you could make a formal complaint to the Insolvency Practitioner but in order to try and challenge the whole IVA you would have to go to Court. This would be a difficult case for you to win.

      If your debt is relatively large (ie adding it would increase the total debt by more than 10%) then it cannot be automatically included without your consent. The only way it could be included would be for the original IVA to be stopped and a new proposal sent out including your debt. You could then accept or reject this. If you rejected and as a result a 75% acceptance majority could not be reached the IVA could not proceed.

      You would then be free to continue your collection action as you see fit.

  2. Jennie says:


    I wanted to know if my overdraft can be left out of my iva as its a joint acc with my partner and he doesnt want to shut the account?

    1. Hi Jennie

      Joint debts can be included in an IVA. However the other party will remain liable for paying the outstanding balance. As such whether you include the overdraft or not your partner will still have to pay it.

      Given this if you have no other debt with the bank then I would be tempted to say leave it out. If you do the bank is unlikely to find out about your IVA and there should be no reason you and your partner cannot continue using it.

      Including the debt in the Arrangement is an advantage for you in the sense that it will protect you if you were to split with your partner and go your separate ways. However including it would alert them to your IVA. They may take no action but it is possible they may want your partner to pay back the overdraft sooner as a result.

  3. Jim says:

    Hi can I leave a debt out of a Iva if its with my bank?
    I do have a loan with them but changing my account would effect my children’s account as there linked to mine!

    1. Hi Jim

      Unfortunately the loan with your bank cannot be left out of your IVA. Continuing to pay this would take up a significant amount of your surplus income and your other creditors would not agree to it. As such you are going to have to include them.

      I do not think you need to worry about your children’s account. My suggestion is open a new account with a different bank and at the same time talk to the new bank about transferring your children’s account to them. I am sure it is not difficult to do and then your problem is solved.

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