What Debts Can Be Included in an IVA? Complete Guide 2026
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.