Mobile Phone Contracts and IVAs

What Happens to My Mobile Phone Contract in an IVA?

Arrears can usually be included, but the provider may then end your contract. If you’re up to date, you may be able to keep it as an essential cost.

Last updated: November 2026

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Things to know about IVAs

An IVA is a formal insolvency procedure. It must be approved by your creditors, stays on your credit file for six years, fees are taken from your payments, and debts are only written off if you complete it. It isn’t right for everyone.

Read the key risks

Creditors must approve it. An IVA only goes ahead if creditors holding at least 75% of the debt that is voted agree. Your proposal can be rejected.
Credit file and public register. An IVA stays on your credit file for six years from the start date and is listed on the public Individual Insolvency Register while it runs. Getting credit will be harder.
Spending restrictions and annual reviews. You live on an agreed budget for the length of the IVA (usually 5–6 years). Your income and spending are reviewed each year, and your payment can go up.
Fees. Fees are taken from your monthly payments, so less of what you pay reaches your creditors. How IVA fees work.
Your home. Under the current IVA Protocol, your home isn’t included in the IVA and you won’t be asked to remortgage. If your share of the equity is £10,000 or more, the IVA usually lasts six years instead of five.
If it fails. If you can’t keep up payments the IVA may fail, you would owe the remaining debt again, and the supervisor may petition for your bankruptcy.
Write-off only on completion. Remaining qualifying unsecured debts are only written off if the IVA is completed successfully. Secured debts, court fines, child maintenance, student loans and some other debts can’t be included.
Other options may suit you better. A debt management plan, DRO or bankruptcy may be more suitable. IVAs are available in England, Wales and Northern Ireland only; different solutions apply in Scotland.

A phone is essential for most people, so it’s natural to worry about losing it in an IVA. What happens depends on whether you’re behind on payments.

The short answer

A reasonable phone bill is usually allowed in your IVA budget.
If you’re up to date, you may be able to keep the contract and leave it out of the IVA.
If you’re in arrears, the debt can usually be included, but the provider may end the contract.
A SIM-only or pay-as-you-go deal can keep costs down.
Handset costs bundled into a contract are a form of credit.

Can I keep my phone contract?

If you’re up to date and the monthly cost is reasonable, it’s often treated as an ongoing living cost and kept out of the IVA. Very expensive contracts may be questioned, because creditors expect your spending to be reasonable. See IVA living expenses.

What if I'm behind on payments?

Arrears are an unsecured debt and can usually be included. Once the provider is a creditor in your IVA, it will normally end the contract. You can then move to a SIM-only or pay-as-you-go deal.

What about handset finance?

Many contracts include a separate device plan. That’s a credit agreement. If you’re up to date, you may be able to keep paying it. If not, it can be included, but you may lose the handset agreement.

Common questions

Can I get a new phone contract during an IVA?

It may be difficult, as providers run credit checks. A SIM-only deal or pay-as-you-go phone is usually easier.

Will my phone be cut off in an IVA?

Only if the provider ends the contract, which is likely if the arrears are included. Keeping up payments on a reasonable contract may let you keep it.

Is a phone bill an allowed expense in an IVA?

Yes. A reasonable phone and internet cost is usually included in your budget.

How IVA Advice Online can help

Every situation is different, and an IVA isn’t right for everyone. We can look at your income, spending and debts with you and set out the debt solutions you could qualify for, including options other than an IVA. To talk it through, get in touch.