Including Council Tax Into An IVA

Can council tax be included into an IVA

Yes, for individuals struggling with debt in the UK, the prospect of including council tax payments in an Individual Voluntary Arrangement (IVA) can provide a lifeline. An IVA is a formal and legally binding agreement between an individual and their creditors to repay a portion of their debts over an agreed period. While council tax is a priority debt, it can still be included in an IVA, offering a structured path to financial recovery.

Understanding Council Tax Arrears

Council tax is a local tax levied by local authorities in the UK to fund essential public services such as rubbish collection, street cleaning, and local schools. Falling behind on council tax payments can have serious consequences, including legal action and additional charges. Including council tax in an IVA can be a strategic move to address arrears and establish a manageable repayment plan.

The IVA Process and Council Tax

  1. Assessment of Financial Situation

Before including council tax in an IVA, individuals undergo a thorough assessment of their financial situation. This includes a detailed examination of income, expenses, assets, and debts. The appointed Insolvency Practitioner (IP) works closely with the individual to create a realistic repayment plan that considers all outstanding debts, including council tax.

  1. Negotiation with Creditors

The Insolvency Practitioner then engages in negotiations with creditors, seeking their approval for the proposed IVA. This includes presenting the case for including council tax in the arrangement. Creditors may agree to the IVA if they believe it offers a more favourable outcome than alternative debt recovery methods.

  1. Setting up the IVA

Once creditors approve the IVA proposal, a formal agreement is established, outlining the terms and conditions of the arrangement. This legally binding document includes details on the agreed monthly payments, the duration of the IVA, and the distribution of funds to creditors, including the portion allocated for council tax.

  1. Regular Payments and Monitoring

Individuals in an IVA are required to make regular monthly payments as per the agreed-upon schedule. The IP monitors the payments and ensures that the funds are distributed to creditors accordingly. Including council tax in the IVA provides a structured framework for addressing this priority debt alongside other financial obligations.

Benefits of Including Council Tax in an IVA

  1. Legal Protection

Once an IVA is in place, individuals benefit from legal protection against further action from creditors, including local authorities pursuing council tax arrears.

  1. Structured Repayment Plan

Including council tax in the IVA allows individuals to create a structured and affordable repayment plan, making it easier to manage multiple debts.

  1. Avoiding Legal Action

By proactively addressing council tax arrears through an IVA, individuals can avoid the potential legal consequences associated with non-payment of this priority debt.


Including council tax in an IVA offers a strategic and legally sound approach to managing debt in the UK. Through careful assessment, negotiation with creditors, and the establishment of a structured repayment plan, individuals can address council tax arrears while working towards overall financial recovery. Seeking the guidance of a reputable Insolvency Practitioner is essential to navigate the complexities of the IVA process and achieve a sustainable path towards a debt-free future.

Is It Possible To Do A Joint IVA ?

A joint IVA is suitable for couples or business partners who have joint debts and are struggling to repay them.

Yes, it is possible to apply for a joint IVA (Individual Voluntary Arrangement) with another person. A joint IVA is suitable for couples or business partners who have joint debts and are struggling to repay them.

A joint IVA allows both parties to consolidate their debts into one affordable monthly payment, which is distributed among their creditors. The terms of the IVA agreement are binding on both parties, and they are jointly responsible for fulfilling the obligations of the IVA.

It is important to note that both parties need to meet the eligibility criteria for an IVA, and their financial circumstances will be assessed together to determine the suitability of a joint IVA. You should consult with an IVA advisor to see if a joint IVA is the right solution for your situation.

To apply for a joint IVA (Individual Voluntary Arrangement), you will need to follow these steps:

  1. Seek Professional Advice: Contact an IVA company who can advise you on the suitability of a joint IVA. They  will assess your financial circumstances and determine if a joint IVA is the right solution for your situation.
  2. Gather Information: Collect all the necessary information, including your personal and financial details, and those of your joint applicant (if applicable), such as debts, assets, income, and expenditure.
  3. Discuss the Terms: If a joint IVA is deemed suitable, the IVA company will discuss the terms of the IVA with you and your joint applicant, including the monthly repayment amount and the duration of the IVA.
  4. Create a Proposal: The Insolvency Practitioner will create a proposal outlining the terms of the joint IVA and present it to your creditors for approval.
  5. Agree with the Creditors: If the creditors agree to the terms of the IVA proposal, it becomes legally binding on all parties, and you will make regular payments to the IP for distribution to your creditors.
  6. Fulfil the Obligations: You and your joint applicant will be responsible for fulfilling the obligations of the IVA, which may include making monthly payments, providing regular financial information to the IP, and adhering to other conditions outlined in the IVA.

It is important to note that a joint IVA is a significant financial commitment, and failure to adhere to the terms of the IVA could result in bankruptcy. Therefore, it is crucial to consult with a Debt advisor before making any decisions about entering into a joint IVA