Which Debts are included in an IVA?

Which Debts are included in an IVA?

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.

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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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8 thoughts on “Which Debts are included in an IVA?

  1. Bruce says:

    Hi can anyone advise me on if I bought flight tickets with PayPal credit for the end of March and Im going to enter an IVA soon and probably put the PayPal credit into the IVA, will the flights be cancelled? Thanks.

    1. Hi Bruce

      I believe you will be able to keep the tickets. Basically this situation is similar to if you had bought something like furniture using store finance. The outstanding finance would have to go into your IVA but you would be able to keep the furniture. It could not be reclaimed by the finance company.

      Given the tickets have already been paid for by PayPal and the money received by the airline then they stand. PayPal are not able to go back to the airline and try to claw back the money paid.

  2. Zack says:

    Can I put parking debts in an IVA. I have one of these which is currently with a bailiff. The original amount was £60 but now they are demanding £350…..

    1. Hi Zack

      Yes most parking charges can be included in an IVA. Commonly these are known as PCNs (Parking Charge Notices). Any PCN issued by a council or private car park company is included in an IVA even if bailiffs are currently being used to collect the debt.

      The only time you cannot include a parking charge is if it was issued by a traffic warden. Technically this is issued by the police and so it is classed as a fine and cannot be included.

  3. Kelly says:

    How is a guarentor loan affected by an IVA? Will they go after the guarentor?

    1. Hi Kelly

      If you are considering an IVA you need to think about any guarantor loans you have very carefully.

      Generally speaking you will need to include the debt in the IVA. However when you do this the loan company will then go after the guarantor for the full balance. If the guarantor cannot afford the payment they too might have to consider a debt management solution.

      You might think about starting an IVA and leaving the guarantor loan out. The only problem with this is you will not be able to include a budget to pay it in your living expenses. As such you will struggle to pay both your IVA and the loan.

  4. Jake says:

    Im a guarantor and am thinking about iva for some other debts, but as this guarantor loan is for a family member i was thinking of leaving the guarantor loan out. I will be more than able to make payments should my family member be unable to make a payment. Is this a bad idea?

    1. Hi Jake

      If you are a guarantor for someone else my advise would be that you should tell the IVA company you are working with about this during the application process. They can then ensure that they make a provision for this debt in the Arrangement. That way if the family member stops paying you will be protected.

      If you do not do this and leave the loan out and you do become liable for the debt it could be a problem. It might put your while IVA at risk if you are unable to afford the payments from savings you can make from your agreed living expenses budget. Do not count on being able to do this. Making payments towards other debts as well as your agreed IVA payment is never easy as the living expenses budget is normally pretty tight.

      Remember the family member you have guaranteed the loan for will be unaffected by your IVA as long as they keep their agreed loan payments up.

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