Unsecured debts that can be included
The vast majority of everyday unsecured debts can be brought into an IVA and are frozen at the point the arrangement is approved. This includes credit cards, store cards, catalogue debts, personal loans, payday loans, guarantor loans (your primary liability), bank overdrafts, buy-now-pay-later balances that have gone to debt collectors, and outstanding mobile phone contracts.
Council tax arrears from previous years can be included. Current-year council tax must continue to be paid separately.
HMRC debts — Self Assessment tax, VAT, PAYE, tax credit overpayments — can all be included. HMRC votes on IVA proposals like any other creditor. Historically HMRC objected to a high proportion of IVAs; more recently their approval rate has increased, particularly where the proposal is realistic.
Benefit overpayments (Universal Credit, legacy tax credits, Housing Benefit) generally can be included, though DWP historically prefers to recover from ongoing benefit payments where possible.
Utility arrears (gas, electricity, water) can be included. Ongoing usage must be paid separately.
Secured debts sit outside the IVA
Any debt secured against an asset — mortgages, secured loans (second-charge loans), car finance (hire purchase or PCP), logbook loans — sits outside the IVA. These continue as normal, and the lender retains its security over the asset.
This is important: if you cannot afford your mortgage, an IVA does not help with that directly. Missed mortgage payments during an IVA can still lead to repossession.
Where a secured debt has an unsecured shortfall (for example if the car is worth less than the finance owed and gets voluntarily terminated), the shortfall becomes unsecured debt and can be included in the IVA.
Debts that cannot be included
Court fines (Magistrates or Crown Court) cannot be discharged through an IVA. They must continue to be paid.
Child maintenance arrears — whether from the Child Maintenance Service or a court order — cannot be included.
Student loans (all types: pre-2012 and post-2012 English/Welsh, Scottish, Northern Ireland) cannot be discharged through an IVA. They continue on their own repayment terms.
Debts arising from fraud, personal injury damages awarded by a court, and social fund loans generally cannot be discharged.
Council Tax Support overpayments where fraud is alleged may be excluded — the Council will normally clarify.
What if a debt is not listed?
You are required to list all your debts in the IVA proposal. Debts you deliberately hide can invalidate the IVA and be pursued for the full balance after completion.
Debts you did not know about at the time (for example a debt that surfaces months later from an old account) can sometimes be added by variation. If not added, they may not be bound by the IVA and creditors can still pursue them.
This is why the initial disclosure and proposal drafting stage is important — a thorough review of all creditors, statements and old accounts before the proposal goes to creditors.