If you’re struggling to keep up with your financial commitments, seeking debt help through an Individual Voluntary Arrangement (IVA) could be a lifeline. An IVA is a legally binding agreement between you and your creditors, allowing you to repay your debts over a set period typically five to six years. But which debts can be included in an IVA, and which cannot? This comprehensive guide will help you understand your options and make informed decisions on your journey toward financial freedom.

Debts That Can Be Included in an IVA

Most unsecured debts can be included in an IVA, making it a flexible solution for many people seeking debt help. Here are the most common types:

• Credit Cards: All outstanding balances, including those with high interest rates, can be included.
• Personal Loans: Whether from a bank, building society, or online lender, these can be part of your IVA.
• Store Cards and Catalogues: Debts from shopping accounts and catalogues are eligible.
• Overdrafts: Both arranged and unarranged overdraft balances can be included.
• Payday Loans: Short-term, high-interest loans can be consolidated into your IVA.
• Utility Arrears: Outstanding gas, electricity, and water bills from previous addresses or suppliers.
• Council Tax Arrears: Debts from previous years or current year if in arrears.
• HMRC Debts: Income tax, VAT, National Insurance arrears, and overpaid tax credits.
• Money Owed to Family or Friends: Informal loans can be included, provided they are documented.
• Other Unsecured Debts: This includes debts from legal costs, veterinary bills, and invoices for services.
• Debts with County Court Judgments (CCJs): CCJs and attachment of earnings orders can be included in your IVA.

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Debts That Cannot Be Included in an IVA

While IVAs are a powerful form of debt help, some debts are excluded. These are typically “priority debts” or those secured against assets:

• Mortgages and Secured Loans: Any debt secured against your home or other property cannot be included.
• Current Rent and Service Charges: Ongoing rent and property service charges must be paid separately.
• Current Utility Bills: You must continue paying for your current utility services.
• Hire Purchase Agreements: Ongoing payments for vehicles or goods under hire purchase cannot be included.
• Student Loans: Both government and private student loans are excluded.
• Child Maintenance and CSA Payments: Legally mandated child support cannot be added to your IVA.
• Court Fines: Fines imposed by a court must be paid as normal.
• Recent Council Tax: The current year’s council tax, if not in arrears, is excluded.
• Debts Incurred by Fraud: Any debt resulting from fraudulent activity cannot be included.

Why Choose an IVA for Debt Help?

An IVA offers several advantages for those seeking debt help:

• Affordable Payments: Your monthly payment is based on what you can reasonably afford.
• Legal Protection: Once agreed, creditors can’t take further action against you or add more interest and charges.
• Debt Write-Off: Any remaining unsecured debt is written off at the end of your IVA term.
• Single Monthly Payment: Simplifies your finances and reduces stress.

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Understanding which debts can be included in an IVA is crucial when considering your debt help options. Most unsecured debts qualify, but some important exceptions apply. Always seek professional advice from a licensed insolvency practitioner or a reputable debt advice charity before committing to an IVA. Taking the right steps now can put you firmly on the path to a debt-free future.

If you’re ready to take control of your finances, reach out for debt help today your fresh start could be just around the corner.