Struggling with debt is stressful enough without worrying about whether your gas or electricity will be cut off. So what happens to your utility bills in an IVA? Rather speak to someone? Call 0800 077 6180.

Jump to article contents:

• Continue paying utilities as normal
• What about arrears on utility bills in an IVA
• Are you allowed a mobile phone contract

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Continue paying utilities as normal

Your utility bills are your core household bills and you need to ensure these are prioritised. These are your basic services including water, electricity, gas, council tax and a telephone line.

You will be given sufficient allowance in your budget to pay your utility bills in an IVA. So basic services would not be cut off. It is important to calculate your expected bills over the whole year, as they get more expensive in winter.

In an IVA your current council tax payment may be included in your IVA until the end of the tax year. We can explain this to you further when you give us a call. Often people pay their credit card or loan payments first and then run out of money each month; resulting in utility bill arrears.

The most important bills to pay first each month are your rent or mortgage, council tax and utility bills. Household and food costs come next.

What about arrears on utility bills in an IVA

The journey to getting into debt often involves not paying your basic expenses first. Getting into arrears can be scary and letters threatening legal action creates a lot of stress.

If you paid all your credit cards and loan payments before your basic costs, you might be in arrears with your utilities. The threat of having electricity or gas cut off can be devastating especially if you have a young family.

In an IVA all your arrears are treated as unsecured debts and are included in your arrangement. This includes council tax on both previous and your current property. Your IVA creates a ‘clean slate’ for you to start fresh.

Your IVA budget will allow for all your utility costs so you don’t have to worry about not affording basic utilities again. However you do need to follow your budget carefully.

Are you allowed a mobile phone contract

In a nutshell, yes. In this day and age communication is an important part of our lives. It connects us to friends and family and is a reasonable expense to include in your IVA budget.

It might be hard to change tariffs during your IVA. A mobile phone contract is actually a credit agreement. Some companies may not offer you a new contract with an IVA on your credit file.

It is a similar story with car insurance. It is a necessity if you drive, so you will have a budget allowance for it. You may find that whilst in an IVA companies will see you as a higher risk, for which they will charge a higher rate.

You would need to be on a reasonable phone tariff. If you have an expensive contract you may have to stop paying it. Anything you owe would then become a debt in your IVA