The debts we see from people working in shops, warehouses and restaurants tend to look similar: a mix of store cards, catalogue accounts, Buy Now Pay Later balances and an overdraft that never quite clears. This page looks at how those debts are treated and whether an IVA is realistic when your hours aren't fixed.
Can I get an IVA on a zero-hours contract?
It's possible, but it needs care. Many people in Gateshead work flexible or zero-hours contracts, and an IVA asks you to commit to a monthly payment for five years, and creditors want to see that the payment is sustainable. If your hours have been fairly steady for a year or more, an average of your recent income may be accepted. If they swing wildly from week to week, a fixed five-year commitment may not be the right fit.
Some people on variable hours are better served by an informal Debt Management Plan, where payments can be adjusted easily. Others with low or unpredictable income may qualify for a Debt Relief Order, which writes debts off after a year with no monthly payment to creditors.
Buy Now Pay Later, store cards and catalogue debt
All three can usually be included in an IVA. They're unsecured debts, so once your IVA is approved the providers can't add interest or late fees, and they must stop chasing you directly.
- Buy Now Pay Later: balances with BNPL providers are included like any other unsecured debt. You'll need to close the accounts and stop using them.
- Store cards: treated in the same way as credit cards.
- Catalogue accounts: included, and the account will be closed to new orders.
Make a list of every account before you get in touch, even the small ones. Small BNPL balances spread across several apps are easy to forget, and anything left out of your proposal won't be covered by the IVA.
Working out what you actually owe
If you've lost track, you can get your statutory credit report free from each of the main credit reference agencies: Experian, Equifax and TransUnion. It won't show every BNPL balance or debts owed to friends and family, but it's a useful starting point. Check your app accounts and email for the rest.
Letters about a county court claim
If a creditor has started court action, the letter usually comes from the County Court Business Centre in Northampton, which handles most money claims online, rather than from a court in Gateshead. You normally have 14 days to respond, so don't ignore it. Respond within the deadline, and let your Insolvency Practitioner know if an IVA is being arranged.
What a CCJ means once you're in an IVA
A county court judgment for an unsecured debt can be included in an IVA. Once the IVA is approved, the creditor can't enforce the judgment, for example by sending enforcement agents. The CCJ itself stays on your credit file for six years from the date it was made.
Hospitality work, tips and seasonal hours
Bars, restaurants and venues around Gateshead Quays and the town centre employ a lot of people on hours that rise and fall with the seasons. If you work in hospitality, a few things affect an IVA:
- Tips and service charges count as income. Since October 2024, employers in England have had to pass tips on to staff in full, so they may now appear on your payslip.
- Seasonal peaks such as December shouldn't be used as your normal monthly income. A year-round average is fairer.
- Quiet months may need to be planned for, for example by setting a slightly lower payment or building a small emergency fund into your budget.
Council tax arrears with Gateshead Council
Council tax arrears are a priority debt, and councils can pass unpaid bills to enforcement agents. Arrears owed to Gateshead Council can normally be included in an IVA, but you'll need to keep paying the current year's council tax. If you're on a low income, ask the council about council tax support, as a lower bill makes your IVA budget easier to sustain.
If your arrears have already been passed to enforcement agents, fees will have been added to the balance. Contact the council and the agents straight away, explain that you're getting debt advice and ask them to hold off while a solution is arranged. A Breathing Space can pause most enforcement for up to 60 days.
Comparing your options before you decide
| Your situation | Option often worth looking at |
|---|---|
| Steady income, debts over around £10,000 | An IVA |
| Variable hours, could repay in full over time | A Debt Management Plan |
| Low income, debts under £50,000, few assets | A Debt Relief Order |
| Enforcement agents or court action imminent | Breathing Space first, then a long-term solution |
This is only a rough guide. Our full comparison of debt solutions explains each option properly.
Why it pays to sort priority debts first
Retail and hospitality pay can be tight, and it's tempting to pay whichever creditor is shouting loudest. Rent, council tax and energy should come first, because the consequences of falling behind are more serious. Once those are protected, an IVA or another solution can deal with credit cards, loans and BNPL. Our types of debt guide explains the difference.
Getting in touch from Gateshead
We're just across the Tyne in Newcastle, but everything is handled by phone and email, so there's nothing to travel for. Use the form at the top of the page and pick a time that works around your rota. The enquiry is free and you're under no obligation.
Free advice is also available from Citizens Advice in Gateshead and from MoneyHelper.
Two quick questions we often hear
Will I still be able to shop online with BNPL?
No. During an IVA you shouldn't take on new credit over £500 without permission, and most BNPL providers will close your account once it's included.
Can my bank close my account?
If you owe money to the bank where your wages are paid, it may close your account. It's usually sensible to open a basic bank account with a bank you don't owe money to before your IVA starts. Most high street banks with branches in Gateshead offer basic accounts.