Your creditors

Which debts are included

Your IVA covers all unsecured debts that existed at approval and were notified to creditors. The full list appears in the schedule of creditors in your IVA proposal. Once approved, those creditors are bound by the IVA's terms — they cannot pursue you separately, charge additional interest, or take enforcement action. Interest and charges on included debts are frozen from the date of approval.

Can creditors contact you?

Once your IVA is approved, included creditors should not contact you to chase payment. All communication regarding those debts should go through your Supervisor. In practice, some creditors using automated systems may continue to send letters, especially early on — usually an administrative error. If this happens, write to the creditor quoting your IVA reference and approval date, tell them all correspondence should go to your IP's firm, and inform your IP if contact continues.

How creditors are paid

Your monthly payments go to your Supervisor, who holds them in a designated trust account. Periodically — typically every six or twelve months — the Supervisor distributes accumulated funds to creditors. This is called a dividend. Each creditor receives a share proportional to the size of their debt. Your IP's fees are paid before dividends are distributed, which is why the pence-in-the-pound that creditors ultimately receive is often lower than your total contributions might suggest. You are entitled to ask your Supervisor for a statement of your IVA account at any time.

Debts omitted from the IVA

If a debt that existed at approval was accidentally left off the schedule, the position can be complicated. An omitted creditor is technically bound by the IVA if they were a known or ascertainable creditor. However, in practice they may argue they were not properly notified. If you have discovered a missed debt, inform your IP immediately.

New debts taken on during the IVA

Your IVA does not cover debts taken on after the arrangement was approved. New creditors are not part of the arrangement and can pursue you independently. Most proposals restrict obtaining new credit above a threshold (commonly £500) without your Supervisor's consent. Breaching this may be treated as a material breach.

Creditor objections and challenges

After approval, a creditor may challenge the IVA's terms if they believe the process was not conducted properly. Challenges must generally be brought within 28 days of the decision. After this, the arrangement is generally secure from procedural challenge. In practice, challenges after approval are uncommon in straightforward consumer IVAs.