If you are thinking about starting an IVA you need to be clear which debts are included. Generally speaking it is just the ones that are unsecured.
- The debts that can be included in an IVA
- Is it possible to include money owed to HMRC?
- Which debts cannot be included?
- Can you choose to keep a debt out of your IVA?
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Which debts are included in an IVA?
All types of unsecured debt can be included in an Individual Voluntary Arrangement (IVA) What are unsecured debts? Can tax and business debts be included? To find out more please visit: http://beatmydebt.com/individual-voluntary-arrangement-frequently-asked-questions/which-debts-are-included-in-an-iva
The Debts that can be included in an IVA
Only unsecured debts in your name can be added to your IVA. These include (but are not limited to) the following:
Credit Cards Personal Loans Doorstep loans Pay Day loans Guarantor loans
Catalogues Store Cards Bank overdrafts HMRC Debts CCJs
A CCJ (County Court Judgment) can also be added into an IVA. It will be overturned once the Arrangement is accepted.
Is it possible to include money owed to HMRC in an IVA?
Any money you owe to HMRC such as unpaid tax or VAT can be included in an IVA. This debt is unsecured and is not treated preferentially over any of your other creditors.
Generally speaking HMRC will accept your proposal as long as it is reasonable. You will need to make sure your personal tax returns are up to date before your offer is submitted.
Overpaid tax credits can also be included in the Arrangement. Any ongoing benefits payments you are receiving should not be affected.
Housing Benefit overpayments can be included in an IVA. The Council can also recover the debt by making deductions from ongoing Housing Benefit payments but outstanding amounts must be written off after your IVA is completed.
Which Debts cannot be included in an IVA?
There are various debts which cannot be included in an IVA. The main category is secured debt. These are things like mortgages, secured loans, Charging Orders and items on Hire Purchase.
If you do not keep up the payments towards these the property they are secured against would be at risk of repossession. A provision must be made in your living expenses budget so you can continue to maintain them.
If you have mortgage arrears an amount can be included in your living expenditure budget to start repaying these.
Other debts that cannot be included in an IVA are Child Support Agency (CSA) arrears, Student Loan Company loans or Court Fines. A provision to pay these in full must be made within your expenditure budget.
Which debts cannot be included in an IVA?
Not all debts can be included in an Individual Voluntary Arrangement (IVA) Is secured debt included in an IVA? Are there any unsecured debts which cannot be included? To find out more please visit: http://beatmydebt.com/individual-voluntary-arrangement-frequently-asked-questions/which-debts-are-included-in-an-iva
Can you choose to keep a debt out of your IVA?
Generally speaking you must include all of your unsecured debts. If you leave any out it could put the Arrangement in jeopardy. Trying to pay them could mean you are unable to afford your agreed IVA payments.
Having said that there are some specific situations where you might be allowed to leave a debt out. An example of this is if you own money to your employer and your job would be at risk if the payments were not maintained.
You can also leave out money owed to friends or family. However you would need to agree to suspend any further repayment to them until after your IVA is completed.
It can be helpful to include friends or family debt in your IVA. Their support might help with getting the Arrangement accepted. However they will normally be excluded from any dividends paid to the other creditors.
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