If you own your home and are struggling with unsecured debt, an IVA is often chosen because it protects your property in a way bankruptcy doesn't. But it isn't the right answer for every homeowner. This page explains how property is handled and the alternatives worth weighing up.
Mortgages, equity and the final-year review
Your mortgage isn't included in an IVA. You keep paying it as normal and the payment sits in your budget as an essential cost. What creditors are interested in is your equity: the value of your home minus everything secured against it.
Estimating your equity
Before you speak to anyone, get a rough idea of your home's value, from recent sales on your street or an online estimate, and check your latest mortgage statement. If you have a secured loan as well, include that balance too.
The review near the end
Around six months before your IVA ends, your home is revalued. If there's enough equity, you'll be asked to try to remortgage and pay a lump sum into the IVA, usually without borrowing more than around 85% of the property's value.
What if a remortgage isn't possible?
Lenders are often cautious about people in an IVA. If you can't remortgage, you won't normally be forced to sell. The usual alternative is to extend the IVA by up to twelve months. Our guide to IVAs and your home covers this in more detail.
Secured loans and second charges on your home
Some homeowners in Stockton have taken out a secured loan, sometimes called a second charge mortgage, to consolidate other debts or pay for home improvements. Because it's secured on your property, it can't be included in an IVA. It's treated like your mortgage: you keep paying it, and the payment goes into your budget.
If you're behind on a secured loan, deal with that first. Missing payments on a debt secured on your home can lead to repossession. Talk to the lender and get advice about the arrears before an IVA is proposed.
Finance for windows, boilers or solar panels
Home improvement finance isn't always secured. Some loans for windows, boilers or solar panels are unsecured credit agreements, which can be included in an IVA. Check your paperwork, or ask your adviser to check, because the difference matters.
Higher-value homes in Yarm and Ingleby Barwick
Property values vary a lot across Stockton-on-Tees. Homes in Yarm and many on the large private estates at Ingleby Barwick are worth more than the borough average, and long-term owners there may have significant equity.
If your equity is large compared with your debts, an IVA may not be the best route. Releasing equity now, with independent mortgage advice, might clear the debts without any formal insolvency. Alternatively, creditors may expect a larger equity contribution, or an earlier one, as part of your proposal. Think carefully about which is better for you in the long run.
Renting in Thornaby, Norton and the town centre
Not everyone in Stockton owns their home. Many households in Thornaby, Norton and around the town centre rent from Thirteen, other housing associations or private landlords. If you rent, the equity questions above don't apply to you, and an IVA is often simpler. Your rent goes into your budget as an essential cost. If your income is low and your debts are under £50,000, check whether a Debt Relief Order would suit you better.
Chemical and process industry jobs in Billingham
Teesside's chemical and process industries are centred on sites around Billingham and the river. These jobs often come with shift allowances, overtime and annual bonuses. An IVA can cope with that, but your budget should be based on a realistic average rather than your best months, and you should check how your proposal treats bonuses before you agree. Large plant shutdowns or restructuring can also affect hours, so tell your supervisor quickly if your pay drops. Contractors brought in for planned shutdowns may earn very well for a few weeks and then nothing, which needs to be averaged carefully.
Council tax with Stockton-on-Tees Borough Council
Council tax arrears owed to Stockton-on-Tees Borough Council can usually be included in an IVA, while the current year's bill stays in your budget. Property bands tend to be higher in the more expensive parts of the borough, so make sure you're using your actual monthly instalment rather than an average.
Should I sell my home instead?
For some people, selling and moving somewhere cheaper, or renting, is a cleaner solution than five years in an IVA. It can clear debts in full and avoid formal insolvency altogether. For others, especially families who want to stay near schools and work, an IVA that protects the home is worth the commitment. There's no single right answer, so take your time weighing it up. Compare your options on our debt solutions page or read the pros and cons of an IVA.
Next steps for homeowners in the borough
Our team is based in Newcastle and handles enquiries by phone and email, so wherever you are in Stockton-on-Tees, there's no need to travel. Have your latest mortgage statement and a rough property value to hand when we speak. Send the form at the top of the page and choose a time to be contacted. The enquiry is free and you're under no obligation.
You can also get free, impartial advice from Citizens Advice or through MoneyHelper.
Homeowner questions we hear often
Can I make overpayments on my mortgage during an IVA?
No. Any spare money should go into your IVA. Overpaying your mortgage would increase your equity at your creditors' expense.
Does it matter whether I live in Yarm or Stockton town centre?
The rules are the same, but property values, council tax bands and therefore equity can be very different, which affects the proposal.
What if my fixed-rate deal ends during the IVA?
Moving to a new deal with your existing lender, a product transfer, is often possible without new borrowing. Tell your supervisor, and make sure any change in payment is reflected in your budget.