Important considerations when it comes to IVA’s

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IVA’s are an ideal money solution for many, but there are various considerations to be taken into account and before you enter into one, you should ensure that an IVA is right for YOU given your personal circumstances.

In this article we take a look at some of the key factors you should take into account before you enter into an IVA and of course, if you’re in any doubt whatsoever then it’s important to talk any concerns through with your chosen advisor.  Remember, IVA’s can only be administered by a registered professional so he or she should be able to address any specific concerns you might have during the application process.


Some employers might stipulate that you aren’t able to enter into an IVA during your period of employment with them.  This is usually true of any job role which involves handling client money or large sums of money.  However, certain job types, such as armed personnel, the police force, solicitors and accountants are also forbidden from entering into an IVA.

To ensure that you’re not in breach of your employment terms you should let your advisor see your employment contract to ensure there are no specific clauses about you entering into an IVA.  If there are then an IVA won’t be a suitable solution for you because, without your income, you won’t be able to maintain your monthly repayments. Otherwise – and provided that your contract is free from such clauses – then you’re under no legal obligation to inform your employer about the IVA and they certainly won’t be contacted about it.

Personal Possessions

If you enter into an IVA then you might want to consider selling any personal possessions you might have (such as vehicles, jewelry and so on) to help you clear any outstanding debt.  Before you do this it’s advisable to get your items fully valued so you get the best possible price for them.

Your home

If you own a property, then the good news is that you won’t be required to sell it for the purpose of entering into an IVA.  However, the arrangement may require that you re-mortgage it during the last year of your IVA in order to release any equity you might have.  In some cases (for example, if your equity is valued at less than £5,000) then it’s unlikely this will be the case – however, you should always be sure to discuss this with your insolvency practitioner, especially if you are looking for help with council tax debt.

Future income

The vast majority of clauses contain a ‘windfall clause’.  This basically means that should you come into any significant funds during the IVA term then you’ll be required to declare them and put them towards your IVA.  Typical examples of this include inheritance, compensation and lottery wins.  If you think you’re likely to receive any significant income during your IVA then again, be sure to discuss it with your advisor.

Credit ratings

Whilst you’re in your IVA you won’t be able to lend any money exceeding £500.00 without written permission from your insolvency practitioner. Consequently, if you think you might need to borrow during the IVA term it probably isn’t the best option and you’ll have to consider other alternatives.