Debts an IVA Cannot Cover, Question by Question
What sits outside an IVA, and why, plus what you can include.
Which debts cannot be included in an IVA?
Mostly secured debts and certain priority debts. An IVA deals with unsecured debts, so the debts left out are mainly secured borrowing, like a mortgage or car finance, and a handful of special categories the law treats as priority: court fines, child maintenance, student loans and debts arising from fraud. These cannot be written off through an IVA and must be paid separately. Everything below explains each one.
What about my mortgage and secured loans?
They sit outside the IVA. Secured debts, your mortgage, secured loans and charging orders, are tied to an asset the lender can repossess if you do not pay, so they cannot be included in an IVA. You keep paying them as normal, and your IVA budget makes an allowance for these essential payments. The IVA deals only with your unsecured debts alongside them.
Is car finance included?
Usually not, if it is secured. Hire purchase and PCP car finance are secured against the vehicle, so they generally sit outside the IVA, you keep paying to keep the car. Check your agreement, as some contain a clause letting the lender end it if you enter an IVA. Any shortfall left after a vehicle is sold, however, is unsecured and can be included. Our car-finance guide covers this in detail.
What about court fines?
Court fines cannot be included. Fines imposed by a court, magistrates' fines, fixed penalty notices, victim surcharges and similar, are priority debts that must be paid in full and separately. Council-issued parking penalties and TV licence arrears are usually treated the same way, as they are pursued through the courts. These are deliberately kept out of insolvency arrangements.
Can I include child maintenance?
No, maintenance is excluded. Child maintenance, whether through the Child Maintenance Service, the older CSA, or a court order, cannot be included in an IVA, and nor can arrears of it. It is a priority obligation that continues to be paid separately. The same applies to other court-ordered maintenance. An IVA does not reduce or write off these payments.
What about student loans?
Student loans are excluded. Loans from Student Finance (for IVAs made from April 2010 onward) cannot be included in an IVA. They have their own income-based repayment terms and are not treated as ordinary unsecured debts, so they continue under those terms regardless of your IVA. You carry on repaying your student loan separately, as normal.
Are debts from fraud included?
No, fraudulent debts cannot be written off. Debts arising from fraud, money obtained dishonestly, cannot be included in an IVA, and would not be written off even if somehow listed. The law does not allow insolvency to clear debts built on deception. Honest debts you simply cannot afford are exactly what an IVA is for; fraud is treated quite differently.
So which debts can be included?
Most everyday unsecured debts. The good news is that the great majority of problem debts do qualify: credit and store cards, personal loans, overdrafts, payday loans, catalogues, utility and council tax arrears, most HMRC tax debts, and county court judgments. For many people, almost everything they owe can go in. Our agreement guide and debt-specific pages cover what is included in full.
Should I get advice?
Yes, especially with a mix of debts. If some of your debts can be included and others cannot, a free, impartial adviser can tell you exactly where you stand and whether an IVA still makes sense, or whether another solution fits better. Where a large share of your debt is excluded, an IVA may not be the right tool. Checking first, at no cost, saves you committing to the wrong thing.
