Your Home and an IVA, Question by Question
Why your home is protected, and the one thing you must keep up.
Will I lose my house with an IVA?
No. An IVA does not force you to sell your home. It is a debt solution built around letting you keep your house while you clear what you can afford of your debts. This sets it apart from bankruptcy, where your home could be at risk. For many homeowners, protecting the family home is the single biggest reason they choose an IVA.
Why is my home safe in an IVA?
Because an IVA is an agreement, not a seizure. Unlike bankruptcy, where a trustee can sell your assets, an IVA is a deal you and your creditors agree to. The terms are set out in your proposal, and a forced house sale is not part of a standard IVA. As long as you keep to the arrangement and keep paying your mortgage, your home stays yours.
What happens to my mortgage?
You keep paying it as normal. Your mortgage is a 'secured' debt, tied to your home, so it is not included in your IVA, and you carry on paying it just as before. The IVA deals with your unsecured debts, credit cards, loans and the like, while your mortgage continues separately. Keeping up your mortgage payments is essential to keeping your home.
Does having equity put my home at risk?
No, but it can affect the length of your IVA. If you have equity, the value of your share of the home above the mortgage, it is taken into account. Under the current rules, that simply means your IVA may run for six years instead of five, with you making extra payments, rather than you having to sell or remortgage. We explain this on our equity in an IVA guide.
What if I am behind on my mortgage?
That needs care. Because your mortgage is secured, your lender can still take action, including repossession, if you fall behind, even during an IVA. Mortgage arrears usually cannot be included in the IVA. The good news is that clearing your unsecured debts often frees up money to catch up on the mortgage. If you are behind, tell your adviser so it can be factored in.
Is my home safer in an IVA than in bankruptcy?
Generally, yes. In bankruptcy, your share of any equity in your home can be claimed and the property may eventually be sold. An IVA is designed to avoid that, letting you keep the home while still dealing with your debts. This is exactly why many homeowners with equity prefer an IVA, and why it is worth comparing the two carefully before deciding.
What if I rent rather than own?
Then there is no home to lose. If you rent, an IVA does not affect your tenancy in itself, and your rent is treated as an essential cost in your budget. You carry on paying it as normal. There can be practical points around credit checks if you move, but renting and being in an IVA sit together perfectly well.
Could my home ever be at risk?
Only in unusual situations. The main risks are not keeping up your mortgage, or agreeing to a non-standard IVA with a sale clause, which is rare and something to question carefully. A standard, well-advised IVA is built to protect your home. If any proposal suggests selling your house, get independent advice before agreeing to anything.
Should I get advice?
Yes, especially as a homeowner. Your home is too important to leave to guesswork. A free, impartial adviser can explain exactly how an IVA would treat your property and compare it honestly with the alternatives. Services like StepChange, MoneyHelper and Citizens Advice are free and independent, and can give you real peace of mind before you decide.
