You are allowed to start an IVA if you are already student or planning study full time. However, it will only be a sensible option if you can sustain the minimum monthly payment. 

Included in this article:

• Can students do an IVA?
• Becoming a student while in an IVA
• Student loans and your IVA
• Alternative debt solutions for students

Want to start an IVA? Call us (0800 077 6180) or complete the form below. The advice is free and confidential

Can students do an IVA?

If you are a student, you an start an IVA.

However, the problem is whether you can afford the monthly payments. If you are studying full time and have very little income, sustaining this could be very difficult.

You will only be able to do an IVA if you and the Insolvency Practitioner (IP) dealing with your case believe it is an affordable option.

If you will struggle, one option is to get help from a third party. Your partner or another family member could agree to pay your IVA for you. This will normally be enough to convince your IP that your payments will be sustained.

Struggling to get your head round all of this? We can help. Call us (0800 077 6180) or complete the form below. The advice is free and confidential.

Becoming a student while in an IVA

You may already be in an IVA but have decided that you want to leave your job and study full time. If so, you need to understand how this will affect the Arrangement.

The key question is again whether or not you will be able to maintain your agreed payments? If not a variation might be accepted allowing smaller payments to be made. However to achieve this you will normally have to extend the length of the Arrangement.

An alternative solution could be settling your agreement early with a lump sum. This may be possible if a friend or family member is able to offer the cash amount required.

If you are not a home owner you can also consider letting your IVA fail and going bankrupt. It is then likely that you will not have to make any further payments towards your debts.

Student Loans and your IVA

Once you start to study it is likely that you will want to apply for a loan from the Student Loans Company (SLC) to help support you. As long as you are eligible for a SLC loan you will be able to get one whether you are in an IVA or not.

If you start an IVA this will result in you getting a poor credit rating. However this will have no effect on your ability to get your SLC loans. This source of income could therefore help you sustain your ongoing payments.

Student Loan Company loans are available to eligible students even during an IVA. However you will not be able to take new standard credit facilities during the arrangement.

Alternative Debt Solutions for students

As a student it is likely that your income will be relatively low. If you are unable to comfortably maintain the payments required for an IVA a more suitable alternative for you could be Bankruptcy.

Once bankrupt you will not have to make payments towards your creditors unless you can afford to do so. Given are living on a minimal student income payments will therefore be unlikely. After 12 months you will be discharged and so the process will be over by the time you finish studying (although your credit rating will remain affected for 6 years).

Students often turn to family members for support when facing debt. If the ‘Bank of Mum and Dad’ are able to help you could make settlement offers to your creditors. You could then agree to repay your parents once you are in full time work.

Thinking about starting an IVA? Give us a call (0800 077 6180) or complete the form below. The advice is free and confidential.