Protected Assets, Question by Question
What an IVA lets you keep, and what it might not.
What assets are protected in an IVA?
The essentials you need to live and work. An IVA is designed to let you keep your home, a reasonable car, your pension, your household goods, and the tools or equipment you need for your job. Rather than stripping your assets, it focuses on your income, you pay what you can afford each month, and most of your possessions are left untouched.
Is my home protected?
Yes, from forced sale. An IVA cannot make you sell your home, which is one of its main advantages over bankruptcy. You keep paying your mortgage as normal, and your equity is dealt with through the length of your IVA rather than by selling up. As long as you meet your obligations, your home stays yours throughout.
Can I keep my car?
Usually, yes, if it is of reasonable value. A car you need for work or family life is normally protected, especially if it is modest rather than luxurious. If you own a high-value car outright, you might be expected to sell it and replace it with something cheaper, contributing the difference. Cars on finance are treated separately, depending on the agreement. A reasonable, necessary car is generally safe.
Is my pension safe?
Generally, yes. Money in an approved pension scheme is usually protected in an IVA and not counted as an available asset. The main thing to watch is pension money you actually draw during the arrangement, a lump sum you take could be treated as income or a windfall. But your pension pot itself is normally left intact, helping protect your future.
What about my furniture and belongings?
Your household goods are protected. Ordinary furniture, appliances, clothing and personal belongings are not at risk in an IVA, there is no question of them being sold. The same applies to the basic things that make a home function. An IVA is not about selling your possessions; it is about an affordable contribution from your income over the term.
Are my work tools protected?
Yes. Tools, equipment or items you genuinely need to do your job or run your business are normally protected, since taking them would undermine your ability to earn and keep paying. This matters especially for tradespeople and the self-employed. As with everything, honesty about what you own and why you need it is important when your proposal is drawn up.
What assets might not be protected?
Genuinely high-value or non-essential ones. While the essentials are safe, assets like a second property, significant savings, valuable items you do not need, or a luxury vehicle may be expected to be contributed for your creditors' benefit. The line is broadly between what you reasonably need and what is surplus. Your supervisor will help identify anything that falls into the latter group.
How does this compare with bankruptcy?
You keep much more in an IVA. In bankruptcy, a trustee takes control of your assets and can sell them, including, potentially, your home. An IVA avoids that: it protects your essential assets and works from your income instead. For many people who want to keep their home, car and belongings, this protection is the single biggest reason to choose an IVA over bankruptcy.
Should I get advice?
Yes, especially if you own significant assets. Which of your assets are protected, and which might need to be contributed, depends on your circumstances, so clear advice matters. A free, impartial adviser can go through what you own and explain exactly how an IVA would treat it, and whether it is the right choice for you. It costs nothing and there is no obligation.
