Most everyday unsecured debts can be included in an IVA. That covers things like credit cards, personal loans, overdrafts, catalogue and store cards, and payday loans. Once these are wrapped into the arrangement, they're covered by your single monthly payment, and any remaining balance is written off when the IVA finishes.
A few types of debt, however, can't normally go into an IVA and must still be paid separately. Knowing the difference matters, because it affects both what you'll repay through the IVA and what you'll need to keep budgeting for on the side.
The short answer
- Can be included: credit cards, personal loans, overdrafts, catalogue debts, store cards, payday loans, and some council tax arrears.
- Usually can't be included: mortgages and secured loans, most student loans, court fines, and child maintenance.
- Included debts are covered by one monthly payment and any balance left over is written off at the end.
- All eligible debts should be listed — you can't pick and choose which creditors to include.
Debts you can usually include
An IVA is designed for unsecured debts — money you've borrowed without putting up an asset such as your home as security. Common examples are:
- Credit cards and store cards
- Personal loans
- Overdrafts
- Catalogue and mail-order accounts
- Payday loans and other short-term high-cost credit
- Money owed to family or friends (though this can be sensitive)
- Some benefit overpayments and certain tax debts
If credit cards are your main worry, our guide to dealing with credit card debt explains how an IVA fits alongside the other routes available.
What about council tax arrears?
Council tax arrears can often be included in an IVA, which many people find a relief given how firmly councils can pursue this debt. There are some nuances — for example around liability orders — so it's worth reading our dedicated guide on IVAs and council tax arrears to understand exactly how yours would be treated.
Debts that usually can't be included
Some debts are excluded by law or by their nature, and you'll normally need to keep paying these separately alongside your IVA:
Secured debts
Your mortgage and any secured loans stay outside the IVA because they're tied to an asset. You carry on paying these as normal so you can keep your home. If you own property, it's also worth understanding how remortgaging during an IVA can come into play later in the term.
Other excluded debts
- Most student loans
- Court fines and penalties
- Child maintenance and Child Support Agency arrears
- Debts arising from fraud
- TV licence arrears in some cases
How included debts are treated once the IVA starts
As soon as your IVA is approved, the debts inside it are effectively frozen. Interest and charges usually stop being added, and the creditors involved can no longer chase you for payment or take further action while you keep to the arrangement. In practice this means the constant letters, calls and mounting balances tend to settle down, and you deal with everything through one monthly payment instead. If debt collectors are contacting you now, our guide on how to deal with debt collectors explains your rights in the meantime.
What if I take on new debt later?
An IVA is based on the debts you owe when it starts, so debts you take on afterwards aren't automatically covered. There are limited situations where a newer debt can be brought in — our guide on adding new debts to an IVA explains when that's possible and what to do if a forgotten debt surfaces after your IVA begins. It's also worth knowing that borrowing more than £500 during an IVA normally needs permission, so taking on fresh credit isn't something to do lightly.
Remember, too, that the cost of the arrangement is met from your monthly payment rather than added on top — see how much an IVA costs for the full picture.
Is an IVA the right way to deal with your debts?
An IVA suits some people well but isn't for everyone. If most of your debt is the unsecured kind listed above and you can afford a regular monthly payment, it may be a strong option. If not, another solution such as a Debt Relief Order or even bankruptcy might be a better fit depending on your circumstances.
For free, impartial guidance on comparing solutions, you can also contact MoneyHelper.
How IVA Advice Online can help
We'll help you list your debts and confirm exactly which ones could go into an IVA and which you'd still need to pay separately — so there are no surprises. If you'd like a clear picture of how your particular debts would be handled, get in touch for free, confidential advice with no obligation.