An Individual Voluntary Arrangement (IVA) can be a lifeline for people struggling with debt, allowing you to write off a significant portion of what you owe whilst making affordable monthly payments. But not every debt can be included in an IVA arrangement.

Understanding which debts qualify is crucial before you apply, as it determines whether an IVA is the right solution for your financial situation. Here’s everything you need to know about IVA-eligible debts and what cannot be included.

Which Debts Can Be Included in an IVA?

Unsecured Debts

The vast majority of unsecured debts can be included in your IVA proposal:

Credit Cards and Store Cards

• All credit card balances
• Store cards (Argos, Next, John Lewis, etc.)
• Overdrafts on current accounts
• Outstanding interest and charges

Personal Loans

• Bank personal loans
• Credit union loans
• Online lender loans (Zopa, Lending Club, etc.)
• Payday loans and short-term credit

Utility Bills

• Gas and electricity arrears
• Water bill arrears
• Council tax arrears (in most cases)
• Telephone and broadband debts

Other Unsecured Debts

• Catalogue debts (Very, Littlewoods, etc.)
• Buy-now-pay-later schemes (Klarna, Clearpay)
• Professional fees (solicitors, accountants)
• Private healthcare bills
• Rent arrears to private landlords

Tax Debts

HMRC debts can often be included, but this depends on the specific circumstances:

Usually Included:

• Income tax arrears
• National Insurance contributions
• VAT debts (for sole traders)
• Corporation tax
• PAYE debts

Note: HMRC has preferential creditor status for certain recent tax debts, which means they may need to be paid in full rather than reduced.

Debts That Cannot Be Included in an IVA

Secured Debts

Secured debts are backed by an asset and cannot be included:

Property-Related:

• Mortgage payments
• Secured loans against property
• Second charges on your home

Vehicle Finance:

• Car finance agreements (HP or PCP)
• Motorcycle or van finance
• Equipment finance agreements

Priority Debts

Some debts carry serious consequences for non-payment and cannot be included:

Court-Ordered Payments:

• Maintenance payments to ex-spouse or children
• Court fines and penalties
• Compensation orders

Student Loans:

• Student loan repayments
• Postgraduate loans
• Professional development loans

Other Priority Debts:

• TV licence fees
• Magistrates court fines
• Benefit overpayments (in some cases)

Recent Debts

Debts incurred immediately before applying for an IVA may be excluded, particularly if creditors can prove they were taken on fraudulently with no intention to repay.

How Much Debt Do You Need for an IVA?

Most IVA practitioners require a minimum debt level of £6,000-£8,000 across multiple creditors. This ensures the arrangement is viable and cost-effective for both you and your creditors.

What Happens to Joint Debts?

Joint debts require special consideration:

• Joint credit cards: Only your portion of the debt can be included
• Joint loans: Your co-debtor remains liable for the full amount
• Guarantor loans: The guarantor becomes liable if the debt is included

Always inform potential guarantors or co-debtors if you’re considering an IVA.

Benefits of Including Debts in Your IVA

Write Off Significant Debt

Upon successful completion of your IVA (typically after 5 years), any remaining balance on included debts is written off completely. Many people see 60-80% of their debt forgiven.

Stop Interest and Charges

Once your IVA is approved, creditors cannot add further interest or charges to included debts, preventing balances from growing.

Legal Protection

An approved IVA provides legal protection against creditor action, including:

• No more bailiff visits
• No court action for included debts
• Protection from bankruptcy petitions

Single Monthly Payment

Instead of juggling multiple creditor payments, you make one affordable monthly payment to your Insolvency Practitioner.

How to Apply for an IVA

Step 1: Assessment

A qualified debt advisor will review your debts, income, and expenses to determine if an IVA is suitable. This includes:

• Listing all debts and monthly payments
• Calculating affordable payment amount
• Ensuring minimum debt thresholds are met

Step 2: Proposal Preparation

Your Insolvency Practitioner prepares a formal proposal to creditors, including:

• Details of included debts
• Proposed monthly payment
• Expected dividend to creditors

Step 3: Creditor Approval

Creditors holding 75% of your debt value must approve the proposal. This typically happens within 28 days.

Step 4: Implementation

Once approved, you begin making monthly payments whilst enjoying legal protection from included creditors.

IVA vs Other Debt Solutions

IVA vs Bankruptcy

• IVA: Keep your home, no public record, partial debt write-off
• Bankruptcy: May lose assets, public record, faster discharge

IVA vs Debt Management Plan

• IVA: Legal protection, debt write-off, fixed term
• DMP: No legal protection, no debt write-off, voluntary basis

Is an IVA Right for You?

An IVA might be suitable if:

✅ You have over £6,000 unsecured debt to multiple creditors
✅ You can afford £100+ monthly payments for 5 years
✅ You want to avoid bankruptcy
✅ Most of your debts are unsecured
✅ You have regular income

An IVA might not be suitable if:

❌ Most debts are secured or priority debts
❌ You cannot afford the monthly payments
❌ You have very little debt overall
❌ Your income is irregular or very low

Get Expert IVA Advice

Deciding which debts to include in an IVA is complex and depends on your individual circumstances. Speaking with a qualified debt advisor is essential to understand your options.

Free, confidential debt advice is available through:

• Citizens Advice Bureau
• StepChange Debt Charity
• National Debtline
• Money Advice Service

Don’t let debt control your life. If you’re struggling with multiple unsecured debts, an IVA could provide the fresh start you need whilst protecting your home and future.

Take the first step today by speaking with a qualified debt advisor who can assess whether an IVA is the right solution for your situation.

If you’re considering an Individual Voluntary Arrangement (IVA) to help manage your debt, one of your biggest concerns might be whether you’ll be allowed to keep your car. For most people, their vehicle is essential for getting to work, taking children to school, and maintaining independence.

The good news is that in most cases, you won’t lose your car when entering an IVA. However, there are some important factors to consider that could affect your ability to keep your vehicle.

The Short Answer: You Can Usually Keep Your Car

Unlike bankruptcy, where assets might be sold to pay creditors, an IVA is designed to allow you to maintain a reasonable standard of living while repaying your debts. This typically includes keeping essential items like your car.

Most IVA providers understand that your vehicle is likely necessary for:

• Commuting to work to maintain your income
• Family responsibilities like school runs
• Essential shopping and medical appointments
• Maintaining your quality of life

When Your Car Might Be at Risk

While most people keep their cars during an IVA, there are some situations where this might not be possible:

High-Value Vehicles

If you own an expensive car that’s worth significantly more than necessary for your needs, your IVA provider might ask you to consider selling it and purchasing a more modest vehicle. The equity released could then go towards your IVA payments.

Outstanding Car Finance

If you have outstanding finance on your car, this becomes more complex. Car finance agreements often include clauses that allow the lender to repossess the vehicle if you enter into formal debt arrangements. However, many IVA providers can negotiate with car finance companies to maintain the agreement, especially if you can keep up with payments.

Unable to Maintain Running Costs

If you can’t afford the ongoing costs of running your car (insurance, tax, MOT, fuel), your IVA supervisor might suggest that keeping the vehicle isn’t practical.

What About Car Finance in an IVA?

Car finance debts can be handled in different ways within an IVA:

Hire Purchase (HP) and Personal Contract Purchase (PCP)

These types of agreements are usually excluded from the IVA because the car serves as security for the loan. You would typically continue making your normal monthly payments outside of the IVA arrangement.

Personal Loans for Car Purchase

If you used an unsecured personal loan to buy your car outright, this debt can be included in your IVA like any other unsecured debt.

Credit Cards or Personal Loans

If you put car-related expenses on credit cards or took out loans for car purchases, these debts can be included in your IVA.

How to Protect Your Car in an IVA

To maximise your chances of keeping your car during an IVA, consider these steps:

1. Be Honest About Your Needs

Clearly explain to your IVA provider why your car is essential. Document your commute, family responsibilities, and any special circumstances that make the vehicle necessary.

2. Consider Downgrading

If you drive a high-value car, consider selling it and purchasing a more modest vehicle before starting your IVA. This shows goodwill to creditors and can provide funds for your arrangement.

3. Keep Up With Car Finance Payments

If you have outstanding car finance, maintaining these payments demonstrates your commitment to honouring agreements and makes it more likely that the finance company will allow you to keep the vehicle.

4. Budget for Running Costs

Ensure you can afford not just the car finance payments, but also insurance, fuel, tax, and maintenance. Include these costs in your IVA budget calculations.

5. Get Professional Advice

An experienced IVA provider can help negotiate with creditors and car finance companies to find the best solution for your situation.

Company Cars and IVAs

If you have a company car provided by your employer, an IVA typically won’t affect this arrangement. Company cars aren’t your assets, so they’re not part of the IVA calculation. However, you should inform your employer about your IVA if your contract requires disclosure of financial arrangements.

What Happens After Your IVA?

Once you complete your IVA successfully (usually after 5 years), any restrictions on your vehicle ownership are lifted. You’re free to purchase any car you can afford without needing approval from an IVA supervisor.

If you maintained car finance payments throughout your IVA, these agreements continue as normal. Completing an IVA can actually improve your credit score over time, potentially making it easier to secure car finance in the future.

Getting Help With Your IVA Decision

If you’re worried about how an IVA might affect your car ownership, it’s important to get professional advice. A qualified debt advisor can:

• Assess your specific situation
• Explain how your car would be treated in an IVA
• Help negotiate with car finance companies if needed
• Explore alternative debt solutions if an IVA isn’t suitable

Remember, every IVA is unique, and what happens to your car will depend on your individual circumstances, the value of the vehicle, and your financial situation.

The Bottom Line

While there’s no guarantee you’ll keep your car during an IVA, the vast majority of people do. The key is being honest about your needs, realistic about what you can afford, and working with an experienced IVA provider who can negotiate on your behalf.

An IVA is designed to help you get back on your feet financially while maintaining a reasonable quality of life – and for most people, that includes keeping the car they need for work and family life.

If you’re considering an IVA and worried about your vehicle, don’t let this concern stop you from seeking help with your debt problems. Professional debt advisors deal with these situations every day and can help you find the best solution for your circumstances.

If you’re self-employed and struggling with debt, you might be wondering whether an Individual Voluntary Arrangement (IVA) is available to you. The short answer is yes — self-employed individuals can absolutely get an IVA, but the process involves additional considerations that don’t apply to employees.

Can Self-Employed People Get IVAs?

Yes, self-employed individuals are eligible for IVAs. In fact, an IVA can be particularly beneficial for self-employed people because it provides protection from creditors whilst allowing you to continue operating your business.

However, the application process is more complex than for employees because:

• Income verification is harder — you’ll need to provide detailed business accounts
• Income can be irregular — monthly payments may need to be flexible
• Business assets may be at risk — depending on your business structure
• Professional reputation concerns — some industries have strict rules about insolvency

How Self-Employment Affects Your IVA Application

Income Documentation Required

Unlike employees who can simply provide payslips, self-employed applicants must submit:

• Two to three years’ worth of business accounts
• Recent profit and loss statements
• Bank statements for both personal and business accounts
• Tax returns and self-assessment forms
• Details of any seasonal income variations

Flexible Payment Arrangements

IVA providers understand that self-employed income can fluctuate. Your IVA can include:

• Variable payments based on monthly income
• Seasonal adjustments for businesses with peak and quiet periods
• Annual reviews to adjust payments based on business performance
• Minimum payment guarantees to ensure the arrangement progresses

Business Assets and IVAs

The treatment of your business assets depends on your business structure:

Sole Trader

As a sole trader, your business assets may be included in the IVA because there’s no legal separation between you and your business. However, essential business equipment is usually protected if it’s necessary for generating income.

Limited Company

If you operate through a limited company, your business assets are generally separate from your personal IVA. However, if you’ve given personal guarantees for business debts, these will be included.

Partnership

Partnership assets may be affected, and you’ll need to consider how your IVA impacts your business partners.

Professional Considerations

Some professions have specific rules about IVAs:

• Accountants and solicitors — may face professional restrictions
• Financial advisers — FCA authorisation may be affected
• Company directors — may need to resign from directorships
• Insolvency practitioners — cannot practice whilst in an IVA

Always check with your professional body before proceeding with an IVA.

Advantages of IVAs for Self-Employed People

• Business continuity — you can keep trading throughout the IVA
• Creditor protection — stops debt collection action
• Debt reduction — typically write off 60-80% of debts
• Single monthly payment — easier to manage than multiple creditors
• Professional reputation — less damaging than bankruptcy

Potential Drawbacks

• Credit rating impact — affects your credit for 6+ years
• Business credit — may impact ability to get business loans
• Ongoing supervision — your finances will be monitored
• Asset restrictions — you cannot sell significant assets without permission

The Application Process for Self-Employed Applicants

Step 1: Initial Assessment

An insolvency practitioner will review your financial situation, including both personal and business finances.

Step 2: Documentation

Gather all required financial documents, including business accounts and projections.

Step 3: Proposal Preparation

Your IP will prepare a detailed proposal explaining how your IVA will work, including provisions for irregular income.

Step 4: Creditor Approval

Creditors holding at least 75% of your debt must approve the IVA.

Step 5: Implementation

Once approved, you make regular payments whilst continuing to operate your business.

Alternatives to Consider

Before committing to an IVA, consider these alternatives:

• Debt Management Plan (DMP) — more flexible but no legal protection
• Business debt restructuring — if debts are primarily business-related
• Time to Pay arrangements — for HMRC debts specifically
• Informal arrangements — negotiating directly with creditors

Finding the Right IVA Provider

When choosing an IVA provider as a self-employed person, look for:

• Experience with self-employed clients
• Understanding of your industry
• Flexible payment arrangements
• Transparent fee structure
• Good reviews from other self-employed clients

Conclusion

Self-employed individuals can definitely get IVAs, and they can be an excellent solution for managing overwhelming debt whilst protecting your business. The key is working with an experienced insolvency practitioner who understands the unique challenges of self-employment.

If you’re self-employed and considering an IVA, seek professional advice to understand how it would work in your specific situation. Every case is different, and what works for one self-employed person may not be suitable for another.

Ready to explore your options? Speak to a qualified debt adviser who can assess whether an IVA is right for your situation as a self-employed person.

Wondering if you qualify for an Individual Voluntary Arrangement (IVA)? Our comprehensive IVA eligibility checker will help you determine whether this debt solution is right for your financial situation. With over 60,000 people entering IVAs each year in the UK, understanding the eligibility criteria could be your first step towards financial freedom.

What Is an IVA Eligibility Checker?

An IVA eligibility checker is a tool that evaluates your financial circumstances against the standard criteria that insolvency practitioners use when assessing IVA applications. It considers factors like your debt levels, income, assets, and personal situation to give you an initial indication of whether you might qualify.

While online checkers provide useful guidance, the final decision always rests with a licensed insolvency practitioner who will conduct a thorough assessment of your case.

Key IVA Eligibility Criteria

Debt Level Requirements

To qualify for an IVA, you typically need:

• Minimum debt of £6,000 – Though most practitioners prefer £10,000+
• Maximum debt around £500,000 – Higher amounts may require different approaches
• Multiple creditors – Usually at least 2-3 different debts
• Unsecured debts – Credit cards, personal loans, overdrafts, store cards

Income and Affordability

Your eligibility also depends on your ability to maintain regular monthly payments:

• Stable income – Employment, benefits, pension, or self-employment
• Surplus income – Money left after essential living expenses
• Typical payments – Usually £100-400 per month over 5-6 years
• Creditor approval – 75% of creditors (by debt value) must agree

Residency Requirements

To be eligible for a UK IVA, you must:

• Be resident in England, Wales, or Northern Ireland
• Have a permanent UK address
• Be able to attend meetings in the UK if required

Types of Debt Suitable for IVAs

Debts That Can Be Included

• Credit card debts
• Personal loans
• Bank overdrafts
• Store cards and catalogues
• Payday loans
• Business debts (for sole traders)
• Council tax arrears
• Income tax and VAT (in some cases)

Debts That Cannot Be Included

• Secured loans (mortgages, car finance)
• Student loans
• Court fines
• Child maintenance
• Debts obtained by fraud

IVA Eligibility Checker: Step-by-Step Assessment

Step 1: Calculate Your Total Debt

Add up all your unsecured debts. If the total is between £6,000 and £500,000, you meet the basic debt threshold requirement.

Step 2: Assess Your Income

Calculate your total monthly income from all sources:

• Salary or wages
• Benefits and pensions
• Self-employment income
• Rental income
• Other regular income

Step 3: Calculate Essential Expenses

List your necessary monthly outgoings:

• Rent or mortgage payments
• Council tax
• Utilities
• Food and household items
• Transport costs
• Insurance
• Essential clothing

Step 4: Determine Surplus Income

Subtract your essential expenses from your total income. If you have at least £100 left over, you likely have sufficient surplus for an IVA.

Step 5: Consider Your Circumstances

Think about factors that might affect your eligibility:

• Are you facing bankruptcy proceedings?
• Do you have valuable assets?
• Are your debts increasing each month?
• Can you realistically maintain payments for 5-6 years?

Common Eligibility Scenarios

You May Qualify If:

• You owe £15,000+ to multiple creditors
• You have £150+ surplus income monthly
• You’re employed or have regular income
• You want to avoid bankruptcy
• You can commit to 5-6 years of payments

You May Not Qualify If:

• Your debts are mostly secured
• You have no surplus income
• Your income is highly variable
• You owe less than £6,000 total
• You’re unwilling to disclose all assets

What Happens After the Eligibility Check?

If you appear eligible for an IVA, the next steps typically involve:

1. Free consultation – Detailed discussion with an insolvency practitioner
2. Income and expenditure review – Thorough analysis of your finances
3. IVA proposal preparation – Formal document outlining your offer to creditors
4. Creditor approval process – Creditors vote on whether to accept your proposal
5. IVA implementation – If approved, your arrangement begins

Professional IVA Eligibility Assessment

While online eligibility checkers provide useful initial guidance, a professional assessment from a licensed insolvency practitioner is essential. They can:

• Conduct a thorough review of your circumstances
• Identify potential issues early
• Suggest alternative solutions if an IVA isn’t suitable
• Provide accurate payment calculations
• Explain the full implications of entering an IVA

Alternative Debt Solutions

If you don’t qualify for an IVA, other options may be available:

• Debt Management Plan (DMP) – Informal arrangement with creditors
• Debt Relief Order (DRO) – For lower debts and limited income
• Bankruptcy – More severe option but faster debt clearance
• Administration Order – Court-managed payment plan

Getting Started with Your IVA Application

If your eligibility check suggests an IVA could work for you, consider these next steps:

1. Gather all your financial documents
2. List all creditors and debt amounts
3. Calculate your exact income and expenses
4. Contact a licensed insolvency practitioner
5. Book a free, no-obligation consultation

Remember, entering an IVA is a significant financial commitment that will affect your credit rating for six years. However, for many people struggling with unmanageable debt, it provides a structured path to becoming debt-free while avoiding the more severe consequences of bankruptcy.

If you’re considering an IVA, don’t delay in seeking professional advice. The sooner you address your debt situation, the more options you’re likely to have available.

If you’re considering an Individual Voluntary Arrangement (IVA) to deal with your debts, one of the first questions on your mind is probably: how much will I actually pay each month? It’s a fair question, and the answer depends on your personal circumstances.

This guide breaks down how IVA monthly payments work, what affects the amount you pay, and what to expect throughout the process.

How Are IVA Monthly Payments Calculated?

Your IVA monthly payment is based on what you can genuinely afford after covering essential living costs. An Insolvency Practitioner (IP) will review your income and expenditure to work out a realistic figure.

The calculation looks at:

• Your total monthly income (wages, benefits, any other earnings)
• Essential outgoings like rent or mortgage, council tax, utilities, food, transport, and insurance
• Any dependants you support
• Reasonable personal spending allowances

Whatever is left over after these essentials is your “disposable income,” and that’s what goes towards your IVA payment.

What’s the Average IVA Monthly Payment?

There’s no one-size-fits-all figure, but most IVA payments in the UK fall somewhere between £80 and £300 per month. Some people pay more, some pay less. It depends entirely on your financial situation.

Here’s a rough guide based on typical scenarios:

• Lower income with high essential costs: £80 to £120 per month
• Average income with moderate costs: £150 to £250 per month
• Higher income with lower outgoings: £250 to £400+ per month

The key point is that your payment should be affordable. An IVA that leaves you unable to cover basic living costs isn’t going to work for anyone.

How Long Do You Make Payments?

A standard IVA runs for five to six years. During this time, you make fixed monthly payments to your Insolvency Practitioner, who distributes the funds to your creditors.

If you’re a homeowner, your IVA might include a clause about releasing equity from your property in the final year. If that’s not possible (or you can’t remortgage), your IVA may be extended by up to 12 months instead.

Can Your IVA Payments Change?

Yes. Your circumstances can shift over the life of an IVA, and the arrangement can adapt to reflect that.

If your income drops

Losing your job or having your hours cut doesn’t automatically end your IVA. You can apply for a payment holiday (sometimes called a payment break), which temporarily pauses your contributions. Most IVAs allow up to three months of payment holidays over the full term.

If your income increases

If you get a pay rise or start earning more, your IVA payments may go up. Most IVAs include a “windfall clause” that requires you to report significant changes in income. Typically, 50% of any increase goes towards your IVA.

Annual reviews

Your Insolvency Practitioner will carry out an annual review of your income and expenditure. If things have changed substantially, your payment could be adjusted up or down.

What Happens If You Miss a Payment?

Missing the odd payment isn’t the end of the world, but it’s something to take seriously. If you know you’re going to struggle, contact your IP as early as possible. They can usually arrange a payment holiday or temporary reduction.

Consistently missing payments without communication is a different matter. If arrears build up, your IVA could fail, which means your creditors regain the right to chase you for the full amount owed.

Do You Pay Interest on an IVA?

No. Once your IVA is approved, interest and charges on the debts included in the arrangement are frozen. You only pay the agreed monthly amount, and at the end of your IVA term, any remaining debt is written off. This is one of the major advantages compared to continuing to pay minimum amounts on credit cards or loans where interest keeps piling up.

What Debts Are Covered by Your IVA Payments?

Your monthly IVA payment covers most unsecured debts, including:

• Credit cards and store cards
• Personal loans
• Overdrafts
• Catalogue debts
• Council tax arrears
• HMRC debts (income tax, National Insurance)
• Some benefit overpayments

Secured debts like your mortgage aren’t included, and neither are student loans, child maintenance, or court fines.

Will an IVA Affect Your Credit Rating?

Yes, an IVA will appear on your credit file for six years from the start date. During that time, getting credit will be harder. But if you’re already struggling with unmanageable debt, your credit score is likely suffering anyway. An IVA provides a structured path out, and once it’s completed and drops off your credit file, you can start rebuilding.

Is an IVA the Right Choice for You?

An IVA isn’t suitable for everyone. Generally, you’ll need:

• At least £6,000 in unsecured debt (though some providers accept lower amounts)
• Two or more creditors
• A regular income to make monthly payments
• Debts you’re genuinely struggling to repay

If your debts are smaller or you have no regular income, other options like a Debt Relief Order (DRO) or bankruptcy might be more appropriate.

Get Free Debt Advice

Before committing to any debt solution, it’s worth getting professional advice. Organisations like StepChange, National Debtline, and Citizens Advice offer free, impartial guidance.

If you’d like to find out whether an IVA could work for you and what your monthly payments might look like, get in touch for a free assessment. There’s no obligation, and it could be the first step towards clearing your debts for good.

Swift Debt Help provides general information about debt solutions. We are not financial advisers. Always seek professional advice before entering into any formal debt arrangement.

If you’re struggling with debt and considering an Individual Voluntary Arrangement (IVA), one of the first questions you’ll have is: which debts can be included in an IVA? Understanding which debts qualify, and which don’t, is essential before you commit to this legally binding agreement.

In this guide, we break down exactly which debts are included in an IVA in 2026, which debts are excluded, and what you need to know before applying.

What Is an IVA?

An IVA is a formal debt solution available in England, Wales, and Northern Ireland. It’s a legally binding agreement between you and your creditors, arranged through a licensed Insolvency Practitioner (IP). You make affordable monthly payments over a fixed period, typically five to six years, and at the end, any remaining qualifying debt is written off.

IVAs are regulated by the Insolvency Act 1986 and supervised by the Insolvency Service, making them one of the most structured and protected debt solutions available in the UK. If you’re unsure whether an IVA is right for your situation, our guide on whether you can get an IVA covers the eligibility criteria in detail.

Debts Included in an IVA

The good news is that most common unsecured debts can be included in an IVA. Here’s a comprehensive list of qualifying debts:

Credit Cards and Store Cards

All credit card and store card debts can be included in your IVA. This covers balances from major providers like Barclaycard, MBNA, Capital One, and high-street store cards. Once your IVA is approved, interest and charges on these accounts are frozen.

Personal Loans

Unsecured personal loans from banks, building societies, and online lenders can all be included. This applies whether the loan is from a high-street bank or a specialist lender. For more on how different loan types work, see our guide to types of loans explained.

Overdrafts

Both arranged and unarranged overdrafts qualify for inclusion in an IVA. Your bank will be notified as a creditor, and the overdraft balance will be treated as an unsecured debt.

Catalogue Debts and Buy Now Pay Later

Debts owed to catalogue companies such as Very, Littlewoods, and JD Williams can be included. Buy Now Pay Later (BNPL) debts from providers like Klarna and Clearpay can also be added to your IVA. This is increasingly relevant in 2026, as the FCA’s BNPL regulatory framework continues to develop, bringing these products under tighter oversight.

Payday Loans

High-interest payday loans and short-term lending debts are fully eligible for inclusion. Given the high interest rates these carry, including them in an IVA can provide significant relief. If you’re currently struggling with a payday loan, read our advice on what to do if you can’t afford your payday loan.

Council Tax Arrears

Outstanding council tax debt can be included in an IVA. However, only arrears up to the date of your IVA proposal qualify. You’ll still need to keep up with current council tax payments going forward.

HMRC Debts (Tax, VAT, National Insurance)

Debts owed to HMRC, including income tax, National Insurance contributions, and VAT, can be included in an IVA. HMRC is treated as any other unsecured creditor and will be bound by the arrangement if it’s approved.

Utility Bill Arrears

Unpaid gas, electricity, and water bills can be included. As with council tax, only arrears up to the IVA proposal date are covered. You must continue paying current utility bills.

Benefit Overpayments

Overpayments of benefits such as Universal Credit, Tax Credits, or Housing Benefit can be included in your IVA, though the DWP may still make deductions from ongoing benefits in some cases.

Debts to Friends and Family

Personal debts owed to individuals can technically be included in an IVA. However, they’ll be treated the same as all other creditors, receiving only a proportion of what’s owed. Many people choose to exclude these for personal reasons.

Debts That Cannot Be Included in an IVA

Certain types of debt are excluded from IVAs by law or by their nature:

• Mortgage and secured loan arrears: these are secured against your property and fall outside the IVA
• Student loans: Student Loans Company debt cannot be included
• Court fines and criminal penalties: magistrates’ court fines and criminal compensation orders are excluded
• Child maintenance (CMS/CSA): ongoing and arrears of child maintenance cannot be included
• Social fund loans: budgeting loans from the DWP are excluded
• Debts arising from fraud: if a debt was obtained through fraudulent activity, it cannot be written off

What About Hire Purchase and Car Finance?

Car finance and hire purchase agreements are secured against the vehicle, so they can’t be included in an IVA in the same way as unsecured debts. However, if you’ve already returned the vehicle and there’s a shortfall balance, that shortfall can be included as an unsecured debt.

If you’re currently making car finance payments, your Insolvency Practitioner will factor these into your budget as an essential expense.

How Much Debt Do You Need for an IVA?

While there’s no strict legal minimum, most Insolvency Practitioners require at least £6,000 in qualifying unsecured debt and a minimum of two creditors before they’ll propose an IVA. The average IVA in the UK covers debts of around £25,000 to £30,000 according to Insolvency Service statistics, but arrangements for both smaller and much larger amounts are common.

What Happens to Interest and Charges?

Once your IVA is approved by creditors, all interest and charges on included debts are frozen. This is one of the biggest advantages: your debt stops growing, and every payment you make goes directly towards reducing what you owe. For a fuller picture of the benefits, have a look at our article on 10 reasons an IVA is worth it.

Can Creditors Refuse to Be Included?

You don’t choose which creditors to include. All unsecured creditors must be listed in your IVA proposal. However, creditors can vote on whether to accept the arrangement. For the IVA to be approved, creditors holding at least 75% of your total debt (by value) must vote in favour.

Once approved, the IVA is binding on all listed creditors, even those who voted against it.

How Much Debt Can Be Written Off Through an IVA?

The amount written off depends on your circumstances, but on average, people in IVAs have 50 to 70% of their qualifying debt written off. Some arrangements result in even higher write-offs. Your Insolvency Practitioner will calculate what you can realistically afford, and the remaining balance is cleared when your IVA completes.

If you want to understand how long the process takes from start to finish, our guide on how long an IVA lasts covers the typical timeline.

Free Debt Advice and Support

Before committing to any debt solution, it’s worth getting free, independent advice. The following organisations offer confidential support at no cost:

• StepChange Debt Charity: free online and telephone debt advice
• MoneyHelper: government-backed guidance on debt options
• Citizens Advice: free local and online debt support

Next Steps: Is an IVA Right for You?

If most of your debts fall into the qualifying categories above and you can afford regular monthly payments, an IVA could be the right solution. The best way to find out is to speak to a qualified debt adviser who can assess your full financial situation.

Our team at Swift Debt Help can review your debts, check your eligibility, and guide you through the process with no obligation. Read our step-by-step guide to applying for an IVA, or get in touch directly.

This article is for general information purposes only and does not constitute financial advice. If you are struggling with debt, we recommend seeking advice from a qualified professional or one of the free debt advice services listed above. Swift Debt Help is not authorised to provide regulated financial advice.

If you’re struggling with debt and your credit score has taken a hit, you might be wondering whether an Individual Voluntary Arrangement is still an option. The good news? Having bad credit doesn’t stop you from getting an IVA. In fact, most people who apply for one already have a poor credit rating.

Here’s everything you need to know about applying for an IVA with bad credit in 2026.

Does Your Credit Score Affect IVA Eligibility?

Your credit score is not part of the IVA eligibility criteria. Unlike a loan or credit card application, an IVA doesn’t require a credit check in the traditional sense. Your Insolvency Practitioner (IP) won’t run a credit score before accepting your case.

What matters instead is:

• You owe at least £6,000 in unsecured debt (though some IPs accept lower amounts)
• You owe money to two or more creditors
• You can afford regular monthly payments towards your debt
• You have a stable source of income, whether employed or self-employed

If you meet those criteria, bad credit won’t stand in your way.

Why Bad Credit Is Common Among IVA Applicants

Most people applying for an IVA have already missed payments, defaulted on accounts, or received County Court Judgments (CCJs). That’s completely normal. The whole point of an IVA is to help people who are already in financial difficulty.

Common signs that lead to both bad credit and IVA applications include:

• Missed credit card or loan payments
• Defaults registered on your credit file
• CCJs issued against you
• Using overdrafts as everyday spending money
• Borrowing from one lender to pay another

If any of those sound familiar, you’re exactly the type of person an IVA is designed to help.

How an IVA Works When You Have Bad Credit

The process is the same regardless of your credit history:

1. Free assessment: You speak with a debt adviser who reviews your income, expenses, and total debts
2. Proposal: Your IP prepares a formal proposal offering your creditors reduced monthly payments over a set period (usually five or six years)
3. Creditor vote: Creditors holding 75% or more of your debt (by value) must agree to the arrangement
4. Approval: Once approved, the IVA becomes legally binding on all included creditors
5. Monthly payments: You make one affordable payment each month, and at the end of the term, remaining debt is written off

Your credit history plays no role in whether creditors accept or reject the proposal. They’re looking at whether your offer is better than the alternatives, like bankruptcy, where they might get nothing at all.

Will an IVA Make Your Credit Score Worse?

An IVA is recorded on the Individual Insolvency Register and stays on your credit file for six years from the approval date. During the IVA, you won’t be able to take on new credit of £500 or more without your IP’s permission.

However, if your credit is already damaged by defaults and missed payments, an IVA gives you a structured path to becoming debt-free. Once the IVA completes and drops off your file, you can start rebuilding your credit from a clean slate.

Many people find their credit score actually improves within 12 to 18 months of completing an IVA, especially if they take steps like:

• Registering on the electoral roll
• Using a credit-builder card responsibly
• Keeping up with all household bills on time
• Avoiding applications for credit in quick succession

What About Secured Debts?

An IVA only covers unsecured debts, including credit cards, personal loans, store cards, overdrafts, catalogue debts, and some forms of council tax arrears. Secured debts like your mortgage or a car on hire purchase aren’t included.

That said, your mortgage and essential living costs are factored into your budget before your IVA payment is calculated. You won’t be asked to pay more than you can genuinely afford.

Can Creditors Reject Your IVA Because of Bad Credit?

Creditors can reject an IVA proposal, but not because of your credit score. They’d typically reject if:

• The offered repayment amount is too low
• They believe you can afford to pay more
• There’s evidence of fraud or reckless borrowing
• They think bankruptcy would recover more money

In practice, most IVA proposals are accepted. The approval rate across the UK has consistently stayed above 90% in recent years. Creditors know that an IVA typically returns more than bankruptcy, so they have a financial incentive to agree.

Alternatives if You Don’t Qualify for an IVA

If your debts are below the typical threshold or your circumstances don’t suit an IVA, other options are available:

• Debt Relief Order (DRO): For debts under £30,000 with minimal assets and low income
• Debt Management Plan (DMP): An informal arrangement to repay debts at a reduced rate
• Bankruptcy: Wipes most debts clean but has more serious consequences for assets and employment
• Breathing Space: A 60-day pause on creditor action while you get advice

A qualified debt adviser can help you work out which solution fits your situation best.

How to Get Started

If you have bad credit and you’re considering an IVA, the first step is a free, no-obligation debt assessment. A specialist will review your debts, income, and expenses to confirm whether an IVA is the right route for you.

You don’t need to fix your credit score first. You don’t need to be a homeowner. You just need to meet the basic eligibility requirements and be committed to making regular payments.

Ready to find out if you qualify? Use our free eligibility checker to get started today.

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Key Takeaways

• Bad credit does not prevent you from getting an IVA
• IVA eligibility is based on debt level, number of creditors, and ability to pay, not your credit score
• Most IVA applicants already have poor credit when they apply
• An IVA stays on your credit file for six years but gives you a clear path to becoming debt-free
• Creditor approval rates for IVAs are consistently above 90%
• After completion, you can rebuild your credit from scratch