Tag: Debt repayments

Person looking at decreased credit score on laptop screen

5 Common Causes of a Decreased Credit Score

Written by Alex Swindells on March 16, 2026. Posted in Credit Score, Debt help.

Updated for 2026

5 Common Causes of a Decreased Credit Score

Your credit score affects almost every financial decision you make, from applying for a mortgage to getting a mobile phone contract. If your score has dropped recently, you are not alone. Millions of people across the UK see unexpected dips in their credit rating each year, and the reasons are not always obvious.

Understanding what causes your credit score to fall is the first step towards fixing it. In this guide, we look at five of the most common reasons your score might have decreased, and what you can do about each one.

What Is a Credit Score and How Is It Calculated?

A credit score is a number that represents how reliable you are as a borrower. In the UK, the three main credit reference agencies, Experian, Equifax, and TransUnion, each use their own scoring system. Experian scores range from 0 to 999, Equifax from 0 to 1,000, and TransUnion from 0 to 710.

These agencies collect data from banks, utility providers, mobile phone companies, and public records such as the electoral roll. They build a picture of your borrowing history, including how much credit you have, whether you pay on time, and how often you apply for new borrowing.

Lenders use this information to decide whether to offer you credit, and at what interest rate. A higher score generally means better deals and lower rates. A lower score can mean higher costs, or being turned down altogether.

You can check your credit report for free through services like MoneyHelper’s guide to checking your credit score. It is worth doing this regularly so you can spot problems early.

1. Using Too Much of Your Available Credit

Your credit utilisation ratio is the percentage of your total available credit that you are currently using. If you have a credit card with a £5,000 limit and you have spent £4,000 on it, your utilisation is 80%. That is high, and it sends a signal to lenders that you might be relying too heavily on borrowed money.

Most experts recommend keeping your utilisation below 30%. So on that £5,000 card, try to keep the balance under £1,500 where possible. If you regularly max out your cards, even if you pay them off each month, your score can still take a hit because the balance is often reported before your payment is processed.

On the other hand, using no credit at all can also work against you. Lenders want to see evidence that you can borrow responsibly. If your cards sit unused for months, there is no recent data to demonstrate good financial behaviour.

The key is balance. Use your credit regularly, keep balances low, and pay off as much as you can each month.

2. Missing or Late Payments

Your payment history is the single biggest factor in your credit score. Even one missed payment can leave a mark on your credit file for up to six years, and the impact is immediate. A payment that is 30 days late will trigger a default marker that lenders can see straight away.

If you have a high credit score, the drop from a missed payment can be especially sharp. Someone with a score of 900 might see a bigger numerical fall than someone already sitting at 500, because the models treat the missed payment as more unusual for someone with otherwise clean history.

Multiple missed payments are worse still. If you fall into arrears, where you owe several months of payments on an account, the damage to your score compounds over time. This can make it harder to access affordable credit when you need it most.

If you have missed a payment, the best thing you can do is get back on track as quickly as possible. Set up direct debits for at least the minimum payment on every account. If you are struggling to keep up with repayments, free debt advice is available from StepChange, who can help you work out a plan.

3. Paying Off a Loan or Closing an Account

This one catches people off guard. You would think that paying off a loan would be good for your score, and in the long run it often is. But in the short term, it can actually cause a dip.

Credit scoring models like to see a healthy mix of different credit types. If you have a mortgage, a credit card, and a personal loan, that diversity works in your favour. When you pay off the loan, you reduce that mix, and your score might drop slightly as a result.

Similarly, closing an old bank account or credit card can shorten the average age of your credit history. Older accounts show stability, so removing them can make your credit profile look younger and less established than it actually is.

Before closing old accounts, check whether they carry any annual fees. If an old credit card costs you nothing to keep open, it might be worth leaving it active, even if you rarely use it. Just make sure there are no forgotten balances ticking away in the background, as even a small unpaid amount can generate missed payment markers.

4. Applying for New Credit Too Often

Every time you apply for a credit card, loan, or other form of borrowing, the lender runs a hard search on your credit file. Each hard search is visible to other lenders and stays on your file for 12 months. One or two searches are not a problem, but several in a short space of time can make it look like you are desperate for credit, which is a red flag for lenders.

If you need to compare deals, look for lenders that offer eligibility checkers using soft searches first. A soft search lets you see whether you are likely to be accepted without leaving a mark on your credit file. Many comparison websites and lenders now offer this, so there is no reason to apply speculatively and risk multiple hard searches.

As a general rule, try to leave at least three to six months between credit applications. This gives your score time to recover from any recent searches and shows lenders that you are not applying everywhere at once.

5. Errors on Your Credit Report

Sometimes your credit score drops and you have done nothing wrong. Mistakes on credit reports are more common than you might think. An account that does not belong to you, a payment incorrectly marked as missed, or outdated address information can all drag your score down without you realising.

Under UK law, you have the right to dispute any inaccuracies on your credit report. The credit reference agency must investigate and correct any errors within 28 days. You can also add a “notice of correction” to your file, which is a short statement explaining any unusual circumstances, such as a period of illness that led to missed payments.

Check your report with all three agencies, as they do not always hold the same information. You can access your Experian report through their free service, your Equifax data through ClearScore, and your TransUnion report through Credit Karma. The gov.uk guidance on credit reference agencies explains your rights in more detail.

What to Do If Your Credit Score Keeps Falling

If you have checked all five of the causes above and your score is still dropping, it may be worth looking at the bigger picture. Persistent debt problems can create a cycle where missed payments and high utilisation feed off each other, making recovery harder over time.

There are formal debt solutions available in the UK that can help you regain control of your finances. A Debt Management Plan (DMP) lets you make reduced monthly payments to your creditors based on what you can afford. An Individual Voluntary Arrangement (IVA) is a legally binding agreement that can write off a portion of your unsecured debt after a set period, typically five or six years.

For smaller debts, a Debt Relief Order (DRO) may be an option if your total qualifying debts are under £50,000. The DRO application fee is now free, making it more accessible than ever. For larger debts where other options are not suitable, bankruptcy remains available, though the court fee of £680 still applies.

Each of these solutions will affect your credit score in different ways, and none of them should be entered into lightly. Free, impartial advice from organisations like StepChange or MoneyHelper can help you understand which option is right for your situation.

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If your credit score has dropped and debt is part of the problem, we can help you explore your options. Our team can talk you through the solutions available and help you find a way forward that works for your circumstances.

Disclaimer: This article is for general information purposes only and does not constitute financial advice. If you are struggling with debt, please seek advice from a qualified professional or contact a free debt charity such as StepChange or MoneyHelper.

Person feeling relieved after learning about IVA protection in the UK

What Protection Does an IVA Offer? Your 2026 Guide

Written by Alex Swindells on March 16, 2026. Posted in IVA.

Updated for 2026

If you are struggling with unmanageable debt, an Individual Voluntary Arrangement (IVA) could give you the legal protection you need to get your finances back on track. An IVA is a formal, legally binding agreement between you and your creditors, set up through a licensed Insolvency Practitioner (IP). It allows you to repay a portion of what you owe over a fixed period, typically five or six years, based on what you can genuinely afford.

But beyond the repayment structure, an IVA offers several layers of protection that many people are not aware of. This guide breaks down exactly how an IVA shields you from further financial pressure in 2026.

Your debts are frozen: no more interest or charges

One of the biggest advantages of an IVA is that, once your creditors approve the arrangement, they cannot add interest, late payment fees or any other charges to your included debts. This means the total amount you owe will not increase for the duration of the IVA.

Without this protection, debts can spiral quickly. Credit card interest alone can add hundreds of pounds each year. With an IVA in place, you know exactly what you owe and exactly what you will pay each month, giving you a clear path forward.

If you are unsure whether your debts qualify, take a look at our guide on what debts can be included in an IVA.

Your home and assets are protected

A common worry for people considering debt solutions is whether they will lose their home. With an IVA, the answer is generally no. Unlike bankruptcy, an IVA does not require you to sell your property unless you voluntarily offer it as part of your proposal.

Once the IVA is approved, your unsecured creditors are legally prevented from taking further enforcement action. That means they cannot:

Apply for a County Court Judgement (CCJ) against you
Instruct bailiffs to seize your belongings
Force the sale of your home
Make deductions directly from your wages (known as an attachment of earnings)

Your car, household items and personal possessions are also typically safe, provided they are not luxury or high-value assets that fall outside reasonable living needs.

Legal protection from creditor action

Perhaps the most powerful aspect of an IVA is the legal protection it provides. Once 75% of your creditors (by debt value) vote in favour of the arrangement, it becomes binding on all of them, even those who voted against it.

This means creditors must stop all collection activity. No more threatening letters, no phone calls demanding payment, and no legal proceedings. If a creditor does attempt to take action against you while your IVA is active, your Insolvency Practitioner can step in on your behalf.

For more information on the legal framework, the GOV.UK guide to IVAs explains how the process works under the Insolvency Act 1986.

Protection from bailiffs

Bailiff visits are one of the most stressful experiences for anyone dealing with debt. Once your IVA is in place, creditors included in the arrangement cannot instruct bailiffs to visit your home or seize your property.

There is one thing to be aware of: it typically takes around four to six weeks for an IVA to be formally approved. During this interim period, you could still be contacted by debt collectors. If this happens, let them know you are in the process of setting up an IVA and provide your Insolvency Practitioner’s details. Most creditors will pause collection activity once they are aware an IVA proposal is underway.

It is worth noting that an IVA only covers unsecured debts. Secured debts such as your mortgage, and certain priority debts like council tax arrears or TV licence fines, are not included. You can find free guidance on dealing with all types of debt through StepChange, one of the UK’s leading debt charities.

Flexibility if your circumstances change

Life does not stand still for five years, and the IVA process accounts for that. If your income drops due to redundancy, illness or a change in family circumstances, your Insolvency Practitioner can adjust your payments accordingly.

Minor changes can usually be handled through a simple payment reduction, sometimes called a payment break. For more significant changes, your IP may arrange a Variation Meeting where a revised proposal is put to your creditors for approval.

This built-in flexibility is one of the reasons many people choose an IVA over other debt solutions. You will not be locked into payments you cannot afford, and the arrangement adapts to your real life situation rather than forcing you into a rigid schedule.

You only pay what you can afford

Before your IVA begins, your Insolvency Practitioner carries out a detailed review of your income and essential outgoings. This includes rent or mortgage payments, utility bills, food, travel costs and other necessary expenses. Only the money left over after these essentials is allocated towards your IVA payments.

Your IVA is reviewed annually, so if your income increases or your costs go up, your payments can be adjusted. The goal is always to ensure you can meet your obligations without falling into further hardship.

Once you have completed all your IVA payments, any remaining unsecured debt included in the arrangement is written off. For many people, this can mean thousands of pounds of debt cleared entirely.

How does an IVA compare to other debt solutions?

An IVA is not the only option available. Depending on your situation, you might also consider:

A Debt Relief Order (DRO), suitable if you owe less than £50,000 and have limited assets. As of 2026, there is no fee to apply for a DRO.
Bankruptcy, which may be appropriate for larger debts but can involve selling assets. The current bankruptcy petition fee is £680.
A Debt Management Plan (DMP), an informal arrangement with lower legal protection than an IVA.

Each option has different eligibility requirements and consequences. You can explore the differences further with MoneyHelper’s debt solutions tool, which provides free, impartial guidance.

If you are weighing up IVA against bankruptcy specifically, our detailed comparison of IVA vs bankruptcy breaks down the key differences.

Will an IVA affect your credit rating?

Yes, an IVA will be recorded on your credit file for the duration of the arrangement, plus an additional 12 months after completion. It will also appear on the Individual Insolvency Register, which is a public record.

This can make it harder to obtain credit during and immediately after your IVA. However, once the IVA is completed and your credit file is updated, you can start rebuilding your score. Many people find they are able to access credit again within a year or two of completing their arrangement. Our guide on how to improve your credit score after an IVA has practical steps to help you recover.

Is an IVA right for you?

An IVA works best for people who have a regular income and owe a significant amount of unsecured debt, typically £6,000 or more to two or more creditors. It offers strong legal protection, freezes your debts, and provides a structured, affordable path to becoming debt free.

If you are ready to explore whether an IVA is the right fit for your situation, you can apply for an IVA online or get in touch with us for a free, no-obligation assessment.

Important: The information on this page is for general guidance only and does not constitute financial advice. If you are unsure about the best course of action for your situation, we recommend speaking to a qualified debt adviser or contacting a free service such as StepChange or MoneyHelper.

Ready to Find Out if You Qualify for Help?

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Person celebrating the end of their IVA at a home desk with financial documents

5 Helpful Things To Consider When Your IVA Ends

Written by Alex Swindells on March 15, 2026. Posted in Debt help, IVA.

Updated for 2026

When your IVA ends, it marks the start of a fresh financial chapter. After completing an Individual Voluntary Arrangement (IVA), your Insolvency Practitioner will confirm that all payments have been made and issue you with a completion certificate. You are now debt free and can move forward with a clean slate. That said, an IVA does leave a lasting mark on your credit file, so there are a few practical steps worth taking to protect your finances going forward. Here are five helpful things to consider when your IVA ends.

Please note: this article is for general information only and does not constitute financial advice. If you are unsure about your situation, seek guidance from a qualified professional.

1. Keep budgeting after your IVA ends

The habits you built during your IVA are genuinely valuable. You have spent years living within a strict budget, and that discipline is worth holding onto now that your arrangement has finished.

Rather than letting your spending creep back up, keep tracking your income and outgoings each month. The money that was going towards your IVA payments can now be redirected into savings or an emergency fund. Building that financial buffer means you are far less likely to end up dealing with problem debt again.

If budgeting feels like a chore, there are plenty of free apps and tools available in 2026 that make it simple to keep on top of your money.

2. Open a savings account or ISA

Now that you are more financially stable, putting money aside for the future makes sense. A high-interest savings account or an ISA is a good place to start.

The main benefit of an ISA is that you will not pay tax on the interest you earn. For the 2025/26 tax year, the annual ISA allowance remains at £20,000. However, there are different types of ISA, and some restrict access to your funds for a set period, so make sure the account you choose suits your needs.

A standard easy-access savings account offers more flexibility if you want to keep your money within reach. Either way, getting into the habit of saving regularly, even small amounts, builds long-term financial resilience.

3. Use credit responsibly to rebuild your score

It might feel counterintuitive, but using credit responsibly after your IVA is one of the most effective ways to rebuild your credit score. The key word here is “responsibly”.

You may not qualify for the best interest rates straight away, but a credit-builder card used for small, regular purchases (paid off in full each month) shows lenders you can manage repayments reliably. Over time, this steady track record helps push your credit score upwards.

If you are comparing your options and wondering whether an IVA was the right choice, you might find our guide on IVA vs bankruptcy useful for context.

4. Monitor your credit report closely

Keeping a close eye on your credit report after your IVA ends is important. It helps you spot errors, track improvements, and make sure everything has been updated correctly.

The three main credit reference agencies in the UK are:

You can check your credit report for free through services like ClearScore, Credit Karma, or directly via the agencies themselves. There is no need to pay for a subscription just to see your score.

Once your IVA is completed, your details will be removed from the Individual Insolvency Register after three months. The IVA itself stays on your credit file for six years from the start date of the arrangement. If that period has passed and it still appears, contact the credit agency with your completion certificate and ask them to remove it.

Also check that debts settled through the IVA are marked as satisfied. Errors are more common than you might think, and they can drag your score down unnecessarily. For more tips on boosting your rating, take a look at our guide to improving your credit score.

5. Register to vote

If you are not already on the electoral register, this is one of the quickest and easiest things you can do to give your credit score a boost. When you register to vote, your name and address are verified and recorded, which makes it easier for credit agencies to confirm your identity.

It will not fix your credit overnight, but it is a simple step that takes about five minutes. You can register to vote online here.

Thinking about what comes next?

Life after an IVA opens up options that may not have been available before. If you are thinking about getting on the property ladder, our guide on getting a mortgage after an IVA covers what you need to know.

If you still have questions about what happens when your IVA ends, or you are struggling with debt and wondering whether an IVA could be the right solution, we can help. At Swift Debt Help, we have years of experience helping people across the UK find the right path out of debt. Get in touch today and a member of our team will answer your questions.

Request a Debt Assessment

Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.

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How to Improve Your Credit Score After an IVA

Written by Alex Swindells on March 15, 2026. Posted in Debt help, IVA.

Updated for 2026

If you have recently completed an Individual Voluntary Arrangement (IVA), you may be wondering how to improve your credit score after an IVA. The good news is that with patience and the right approach, you can rebuild your financial standing and access credit again.

How Long Does an IVA Stay on Your Credit Report?

An IVA remains on your credit report for six years from the date it was registered. Once that period ends, it is removed automatically. Your entry on the Insolvency Register will also be cleared, which is a significant step towards a fresh start.

Keep in mind that it can take a few weeks for the records to update across all three credit reference agencies (Experian, Equifax and TransUnion). If you notice the IVA still showing after six years, contact the agency directly with a copy of your IVA completion certificate and they will correct the record.

Confirm Your IVA Is Fully Completed

Before you focus on rebuilding, make sure your IVA has been formally completed by your Insolvency Practitioner. They will confirm that all required monthly payments were made on time. If any payments were missed, the arrangement may have been extended. Once everything is settled, you will receive a completion certificate.

If you were asked to remortgage your home as part of the IVA terms, ensure that has also been resolved before you consider the arrangement complete.

Steps to Improve Your Credit Score After an IVA

1. Check your credit report for errors

Request a copy of your credit report from all three agencies. Look for any debts that were included in the IVA but are still showing as outstanding. These should be marked as “satisfied” or removed entirely. Errors like this can drag your score down unnecessarily.

2. Register on the electoral roll

Being registered at your current address gives your credit score an immediate boost. Lenders use the electoral roll to verify your identity and address, so this is one of the quickest wins available.

3. Pay all bills on time, every time

Your payment history is one of the biggest factors in your credit score. Set up direct debits for household bills, mobile phone contracts and any other regular payments. Even a single missed payment can set you back significantly.

4. Use a credit builder card responsibly

A credit builder card is designed for people with poor or limited credit history. Spend a small amount each month and pay the balance in full. This demonstrates to lenders that you can manage credit responsibly. Avoid carrying a balance, as the interest rates on these cards tend to be high.

5. Keep your credit utilisation low

If you do have access to credit, try to use no more than 25% of your available limit. High utilisation signals to lenders that you may be relying on credit to get by, which can hurt your score.

6. Avoid multiple credit applications

Each application leaves a “hard search” on your credit file. Too many in a short space of time can make you look desperate for credit. Space out any applications and use eligibility checkers (which only perform a soft search) before applying.

7. Build a savings habit

While savings do not directly affect your credit score, having a financial cushion reduces the risk of falling back into debt. During your IVA you will have grown used to living within a budget, so try to maintain that discipline and put aside what you can each month.

How Long Does It Take to Rebuild Your Credit After an IVA?

There is no fixed timeline. Some people see noticeable improvements within 12 months of their IVA ending, while for others it can take two to three years to reach a “good” credit score. The key is consistency: keep up with payments, avoid unnecessary debt and be patient.

What If an IVA Was Not the Right Option?

If you are still struggling with debt or an IVA was not suitable for your situation, there are other solutions worth exploring. A Debt Relief Order (DRO) is now available for debts up to £50,000 and the application fee has been removed entirely since April 2024, making it free to apply. Bankruptcy is another option, with the current application fee at £680. Each solution suits different circumstances, so it is important to get proper advice before making a decision.

Ready to Find Out if You Qualify for Help?

Use our Solution Finder for a free, no-obligation assessment. Our team can help you understand your options and take the first step towards a debt-free future.

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Person reviewing IVA debt solution paperwork at kitchen table

5 Scenarios Where an IVA Could Be the Best Solution

Written by Alex Swindells on March 15, 2026. Posted in Debt help, IVA.

Updated for 2026

If you are struggling with debt and wondering whether an IVA (Individual Voluntary Arrangement) is right for you, it helps to understand the situations where this solution works best. An IVA allows you to make affordable monthly payments towards your debts over a fixed period, typically five or six years. Any remaining unsecured debt included in the arrangement is written off once you complete it.

This guide covers five common scenarios where an IVA could be the most suitable debt solution for your circumstances.

1. You owe debts to multiple creditors

An IVA is particularly well suited if you owe money to several different lenders. When you only have a single creditor, it is usually simpler to contact them directly and negotiate a repayment plan. A single debt is far easier to manage, and you can often reach an informal agreement without entering a formal insolvency solution.

However, juggling repayments to multiple creditors is where things get complicated. Keeping track of different payment dates, amounts and interest rates is stressful, and this is often how people lose control of their finances. With an IVA, you make one single monthly payment to your Insolvency Practitioner, who then distributes the funds to your creditors on your behalf. This simplifies everything and can result in a portion of your qualifying unsecured debts being written off at the end.

2. You can afford regular monthly repayments

Before entering an IVA, a licensed Insolvency Practitioner will carry out a thorough assessment of your finances. They will review your income and essential living costs to work out what you can realistically afford to pay each month.

If you have a steady source of income and are confident you can maintain the agreed repayments for the duration of the arrangement, an IVA is a strong option. Both you and the Insolvency Practitioner need to be satisfied that the plan is sustainable over the full term. If your income is irregular or unpredictable, you may want to explore whether a self-employed IVA structure could work for you.

3. You owe more than £6,000 in unsecured debt

An IVA is designed for people who cannot realistically repay their unsecured debts within a reasonable timeframe. If you owe a relatively small amount, improved budgeting or an informal arrangement with your creditors might be enough to get things under control.

For debts above £6,000, the picture changes. Fees are built into the IVA and come out of your affordable monthly payment, so creditors are unlikely to agree to an arrangement where you could potentially repay them in full over a similar period without those fees. If you are unsure whether you meet the threshold, our guide on how much debt you need for an IVA explains the eligibility criteria in more detail.

For those with lower levels of debt, a Debt Relief Order (DRO) may be more appropriate. Since April 2024, the DRO debt threshold has increased to £50,000 and the application fee has been removed entirely, making it accessible to more people than ever before.

4. Your employment allows it

In most cases, an IVA will not affect your job. You can continue working as normal throughout the arrangement. However, certain professions have restrictions around formal insolvency solutions.

Jobs that typically do not allow you to hold an IVA include roles in:

Accountancy
Financial services
Law
The police or military

Some employers in other industries may also have policies around insolvency. It is always worth checking your employment contract or speaking confidentially with your employer before proceeding. There are also common myths about IVAs that can cause unnecessary worry, so it is worth separating fact from fiction.

5. You want protection from creditor contact

One of the biggest sources of stress when you are in debt is the constant phone calls, letters and emails from creditors chasing payment. This pressure can take a serious toll on your mental health and often stops people from dealing with their debts at all.

An IVA provides legal protection from your creditors. Once the arrangement is in place, they are no longer permitted to contact you for payment. Your Insolvency Practitioner handles all communication and negotiation on your behalf. They draft the proposal, present it to your creditors, handle any disputes and distribute your monthly payments.

If dealing with creditors is causing you significant stress, an IVA removes that burden completely and gives you the breathing space to focus on getting back on track financially.

What other options are available?

An IVA is not the only debt solution out there. Depending on your situation, you might also consider bankruptcy (which currently costs £680 to apply for), a debt consolidation loan, or a Debt Relief Order. Each option has different eligibility requirements, so it is important to understand the pros and cons before making a decision.

If you need guidance on whether an IVA is right for you, get in touch with Swift Debt Help today and speak to a member of our team. We can help you understand your options and find the right path forward.

This article is for general information purposes only and does not constitute financial advice. If you are unsure about the best debt solution for your circumstances, please seek independent advice from a qualified professional.

Request a Debt Assessment

May not be suitable in all circumstances, Fees may apply, your credit rating may be affected.

Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.

Ready to Find Out if You Qualify for Help?

Use our Solution Finder for a free, no-obligation assessment. Our team can help you understand your options and take the first step towards a debt-free future.

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Person reviewing financial documents and bills at a desk organising debts for an IVA

12 Debts That Can Be Included in an IVA

Written by Alex Swindells on March 15, 2026. Posted in Debt help, IVA.

Updated for 2026

An IVA (Individual Voluntary Arrangement) is one of the most popular debt solutions in the UK, and it could allow you to write off a significant portion of the debts included in an IVA. There is no upper limit on the total amount of debt you can include, but only certain types qualify. Below are 12 common debts that can be included in an IVA.

1. Catalogue debts included in an IVA

Catalogues are a convenient way of spreading the cost of purchases, but they often carry high interest rates. If repayments have become unmanageable, your catalogue debts can be included in an IVA. You would need to stop using catalogues for future purchases so you can stick to your monthly budget going forward.

2. Credit card debt

Credit card debt is one of the most common types of unsecured debt in the UK. Many people manage balances by transferring them between cards or making minimum payments, but eventually this can spiral. If your credit card repayments have become unaffordable, particularly alongside other debts, they can be written off through an IVA.

3. Personal loans

Unsecured personal loan repayments are a fixed monthly cost with little flexibility. If you took out a loan to consolidate other debts, the repayment can be substantial. Unsecured personal loans are included in an IVA, which could reduce your monthly outgoings considerably.

4. Overdrafts

Overdrafts are often used as a short-term way to cover bills or other payments, but getting out of one can feel impossible when you are already stretched. You also risk penalty charges if you accidentally exceed your limit. Overdrafts can be included in an IVA. It is generally advisable to switch your bank account to a provider you do not owe money to before starting your arrangement, as accounts with outstanding debts may be frozen.

5. Gas and electricity debt

Building up arrears with your energy supplier is more common than you might think, especially given rising fuel costs. Gas and electricity debts are unsecured, so they can be included in an IVA. This covers debts from your current property and any previous addresses. Your ongoing utility bill payments will be factored into your monthly budget assessment, so you should be able to keep up with future usage.

6. Water arrears

The rules for water arrears are the same as for gas and electricity. Any existing water debts can be included in your IVA, and your ongoing monthly water payments will be built into your budget so that future bills remain manageable.

7. Council tax arrears

Council tax arrears are classed as a priority debt because the consequences of non-payment can be severe, including bailiff action and, in extreme cases, imprisonment. These debts can be included in an IVA. If you are struggling with council tax debt, it is important to seek advice as early as possible.

8. Payday loans

Payday loans are designed for short-term borrowing, but the reality is that many people end up trapped in a cycle of high-interest repayments. If you can only afford the minimum payment each month, the debt keeps growing. Like other unsecured debts, payday loans can be included in an IVA.

9. Store cards

Store cards can seem attractive when retailers offer discounts at the point of sale, but the interest rates tend to be high. If you have balances spread across several store cards, keeping up with repayments can become difficult. Store card debts are unsecured and can be included in an IVA.

10. Income tax and National Insurance arrears

If you are self-employed (or have been in the past), you may have built up debts with HMRC for income tax or National Insurance. These can be difficult to manage alongside other creditors. Historic HMRC debts, along with the estimated liability for your current tax year, can be included in your IVA alongside other unsecured debts.

11. Tax credit overpayments

If you claim tax credits, overpayments can occur when the DWP holds incorrect information about your circumstances. These overpayments may be recovered from future payments or deducted from your wages. In most cases, tax credit overpayment debts can be included in your IVA.

12. Guarantor loans

A guarantor loan involves a friend or family member agreeing to cover repayments if you cannot. As an unsecured debt, guarantor loans can be included in an IVA. It is worth noting that the lender may pursue your guarantor for any unpaid balance, so this is something to discuss with your insolvency practitioner.

What about debts that cannot be included?

Not every type of debt qualifies for an IVA. Secured debts such as your mortgage or a hire purchase agreement cannot be included. Student loans, child maintenance arrears and certain court fines are also excluded. If you are unsure whether your debts qualify, it is worth getting professional advice. You might also want to consider a Debt Relief Order or bankruptcy as alternative options depending on your circumstances.

Need help with your debts? Get in touch today

At Swift Debt Help, we provide general guidance on IVAs and other debt solutions. We can help you understand how much debt you need for an IVA, which of your debts might qualify, and what alternative options are available to you.

Fill out the contact form below, send us an email, or give us a call to take the first step towards dealing with your debt.

This article is for general information only and does not constitute financial advice. If you need advice tailored to your situation, please speak to a qualified debt adviser or insolvency practitioner.

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