Utilities and Your IVA, Question by Question
What goes in, how your supply is protected, and what you still have to pay.
Can utility bill arrears be included in an IVA?
Yes. Arrears on household utilities, gas, electricity, water, and your phone or broadband, are unsecured debts, so they can usually be included in an IVA. Once the arrangement is approved these arrears are frozen, the supplier is bound by it, and any qualifying balance left at the end is written off in the same way as your other debts.
What about my current, ongoing bills?
Those stay your responsibility. Only the arrears that exist when your IVA is set up go into it; your ongoing energy, water and communications bills are not included, and you must keep paying them in full throughout. Your current usage is built into your budget as an essential cost, so the payment into your IVA is worked out after your everyday bills are covered.
Will I still have gas and electricity?
Yes. Your energy supplier cannot disconnect you, or chase you, for arrears that are included in the IVA once it is approved. However, to secure your ongoing payments, the supplier may ask to move you onto a prepayment meter, where you pay for energy as you use it. That keeps your supply on while the old debt is dealt with inside the arrangement.
Can I switch energy supplier if I include arrears?
It can be more difficult. Suppliers are often reluctant to let you switch while you owe them money, and including the arrears in an IVA does not automatically clear that hurdle. Depending on how much is owed and your meter type, switching may still be possible, but it is worth checking before assuming you can move. A free adviser can explain the current rules for your situation.
What about water arrears?
Water arrears can be included too, and there is some reassurance here: by law, your water supply cannot be disconnected for non-payment. That does not mean the debt disappears, the arrears are still owed and can be brought into your IVA, where they are frozen and partly written off, but you do not face being cut off. As with energy, you must keep paying your ongoing water charges.
What about phone and broadband arrears?
These can be included as well. Arrears on a mobile, landline or broadband contract are unsecured debts and can go into the IVA. Bear in mind, though, that the provider may stop the service once the account is in arrears, so you might need a new contract elsewhere for your ongoing phone or internet. Keeping a working connection is usually treated as a reasonable cost in your budget.
How much of the arrears is written off?
The same way as your other unsecured debts. Utility arrears are not given special priority within an IVA, they sit alongside your other creditors. You pay what you can afford over the term, and whatever qualifying balance remains at the end is written off. How much that is depends on your overall affordability, not on the utility debt by itself.
What if I fall behind on current bills during the IVA?
New arrears would not be covered. Because only the debt at the start is included, any current bills you fail to pay during the IVA become fresh debts outside the arrangement, and with energy that can risk your supply. It can also put your IVA at risk. If your bills are becoming unmanageable, tell your supervisor as soon as possible so your budget can be reviewed.
Should I get advice?
Yes. Utilities are essential, so it is worth getting the details right: how your supply will be protected, whether a prepayment meter is involved, and what happens to your ongoing bills. A free, impartial adviser can talk you through all of this and tell you honestly whether an IVA, or another route, is the best way to deal with your utility arrears and the rest of your debt.
