Most people who ask us about IVAs aren't wondering whether IVAs are legal or how creditors vote. They want to know practical things: will my landlord find out, what happens to my rent, and can I still afford to get to work? Those are the questions this page tries to answer.
Can I get an IVA if I rent in Newcastle?
Yes. Renting doesn't stop you getting an IVA, and a large share of households in the city rent from a private landlord or a social housing provider. Your rent is treated as an essential cost and goes into your budget before your IVA payment is worked out. You don't have to pay less rent to make room for creditors.
Your landlord isn't contacted when your IVA is set up. The arrangement is recorded on the public Insolvency Register, but landlords rarely search it. Where an IVA can come up is when you apply for a new tenancy, because many letting agents run a credit check. If you're planning to move during the next few years, tell the agent upfront and offering a guarantor or a larger deposit if you can.
What about rent arrears?
Rent arrears need careful handling because they can lead to eviction. Arrears owed to a current landlord are often kept outside the IVA and cleared through a separate repayment arrangement, so your tenancy stays safe. Arrears from a previous tenancy can usually be included like any other unsecured debt.
How your bills and council tax fit into an IVA
Your budget includes all the bills you need to pay to keep your home running. The aim is a payment you can keep up for five years, not one that leaves you short every month.
Council tax arrears with Newcastle City Council
Council tax is a priority debt because councils have strong collection powers, including enforcement agents. Arrears can usually be included in an IVA, but your ongoing council tax must be paid on time throughout. If you're on a low income, check whether you qualify for a reduction through Newcastle City Council's council tax support scheme before your budget is finalised, as a lower bill means a more affordable IVA.
Other help from the council
Like most councils, Newcastle City Council offers some support for residents in financial hardship beyond council tax reductions, such as discretionary help in an emergency. What's available changes from year to year, so check the council's website or ask an adviser before your budget is finalised. Any regular support you receive should be included in your income, and any one-off help won't normally be taken into the IVA.
Energy debts and prepayment meters
Gas and electricity arrears can normally be included. If you've been moved onto a prepayment meter because of arrears, the extra amount being collected through the meter should stop once the debt is part of your IVA. Your supplier will need to be told, and your Insolvency Practitioner can do this.
Students, graduates and university staff
With Newcastle University and Northumbria University both in the city, a lot of our readers are students, recent graduates or people working in higher education. A few points are specific to this group:
- Student loans can't be included in an IVA. Repayments are taken through payroll once you earn over the threshold and are counted in your budget.
- Graduate overdrafts and credit cards can be included, and often make up most of the problem debt for people in their twenties.
- Fixed-term contracts are common in universities. An IVA can still work, but your payment may need reviewing if a contract isn't renewed.
If you're still studying and have little income, an IVA is unlikely to be right. A Debt Relief Order or a short break through Breathing Space may be better places to start.
Moving away after your course
Plenty of graduates leave Newcastle for work elsewhere, and plenty stay. An IVA moves with you. If you relocate anywhere in England, Wales or Northern Ireland, you tell your supervisor your new address and your budget is reviewed to reflect the new rent and travel costs. Moving to Scotland during an IVA is more complicated, so get advice before you commit to it.
City living costs and a realistic budget
Insolvency Practitioners use the Standard Financial Statement, which sets out reasonable spending limits for households of different sizes. Your actual costs matter too. Living in central Newcastle might mean higher rent but little spent on travel. Living in the outer estates might mean the reverse, with bus or Metro fares, or a car, becoming a bigger part of your outgoings. Bring real figures to your first conversation, including what you spend on getting to work, so the budget reflects your life rather than an average.
Would something other than an IVA suit me better?
An IVA is one option among several, and it isn't always the right one.
When a Debt Relief Order makes more sense
If your debts are under £50,000, you have less than £75 a month left after essential costs and you don't own your home, a DRO is usually quicker and costs nothing. It lasts twelve months rather than five years.
When a Debt Management Plan makes more sense
If you could clear what you owe within a few years at a reduced rate, an informal Debt Management Plan avoids insolvency altogether. It isn't legally binding, but it's flexible and free providers exist.
Our debt solutions comparison sets out every option side by side, and the IVA calculator gives a rough illustration using your own figures.
Talking to a team on your doorstep
Our team is based in Newcastle upon Tyne, but IVAs are arranged by phone, email and post, so you won't need to come to an office. Send the form at the top of this page and we'll get in touch at the time you choose. There's no charge for the enquiry and no obligation to go ahead.
You can also get free, impartial advice from Citizens Advice in the city or through MoneyHelper. Whoever you speak to, they should explain all your options before recommending one.
Common questions from Tyneside renters and workers
Will my employer find out about my IVA?
Your employer isn't contacted. Some contracts, particularly in finance, law and some public sector roles, ask you to declare formal insolvency, so check your contract or speak to HR in confidence.
Can my IVA include a debt from when I lived somewhere else?
Yes. What matters is where you live now, whether that's Newcastle or anywhere else in England, Wales or Northern Ireland. Debts taken out anywhere in the UK can be included, as long as they're the types of debt an IVA can cover.
How long does it take to set up?
Usually four to eight weeks from your first conversation, depending on how quickly documents such as payslips and bank statements are provided.