Check if an IVA is right for you

Summary

Lasting power of attorney is a legal role that gives you legal authority to make decisions for someone else. For example, you might have control of their home and money. Your lasting power of attorney isn’t affected by an IVA. Most of your belongings won't be affected by having an IVA - for example, items you use in your home. If you own more expensive items, such as antiques or expensive jewellery you might want to sell them to help pay your debts. High value items like a ‘home’, ‘land’ or a ‘car’ are called assets and can be included in your IVA. This means you will sell them and use the money to pay the creditors. You don’t need to have any particular assets to get an IVA. Your insolvency practitioner will talk to you about your assets and whether they should be included in the IVA or whether you can keep them. You must tell the insolvency practitioner about all your assets. If you don’t tell them about something you’ll be breaking the law. Any assets that you want to keep, such as a car, must be excluded from the IVA. If you don't want to include an asset and the insolvency practitioner doesn't think your creditors will agree to exclude it, your insolvency practitioner won't.

Key information

• Lasting power of attorney is a legal role that gives you legal authority to make decisions for someone else. For example, you might have control of their home and money.
• Most of your belongings won't be affected by having an IVA - for example, items you use in your home.
• If you own more expensive items, such as antiques or expensive jewellery you might want to sell them to help pay your debts.
• High value items like a ‘home’, ‘land’ or a ‘car’ are called assets and can be included in your IVA. This means you will sell them and use the money to pay the creditors. You don’t need to have any particular assets to get an IVA.
• Your insolvency practitioner will talk to you about your assets and whether they should be included in the IVA or whether you can keep them. You must tell the insolvency practitioner about all your assets. If you don’t tell them about something you’ll be breaking the law.
• Any assets that you want to keep, such as a car, must be excluded from the IVA. If you don't want to include an asset and the insolvency practitioner doesn't think your creditors will agree to exclude it, your insolvency practitioner won't send the proposal to your creditors.
• If you have savings, you usually have to include these in your IVA, either by paying your creditors a lump sum or using the money to make monthly repayments.
• If you owe money to your bank or a company connected to them, your bank can take money out of your account to pay the debt. It’s a good idea to get your income paid into an account at a different bank before your IVA starts. Your insolvency practitioner should help you with this.
• It might be a problem if you work in certain professions - for example, if you're a solicitor or accountant. You might not be able to keep working in your profession while you have the IVA, or you might have to follow certain conditions.
• If you're worried about the impact of an IVA on your job, check the terms and conditions of your contract. Check if it says anything about continuing to work when you have an IVA.
• If you're getting a State Pension, it will be included when you work out how much you can afford to pay into an IVA.
• If you get money from a personal or occupational pension, it will be included when you work out how much you can afford to pay into an IVA.

Practical guidance

• Source: Check if an IVA is right for you

Related topics

More in this area

• Check if a financial service has followed the rules
• Check if you have to pay a debt
• Check the rules after you go bankrupt
• Check what an IVA is
• Cold called by a debt management plan provider