Assets, Property and Equity in an IVA

Will an IVA affect my home?

If you own your home, it’s normal to feel worried about it. An IVA is designed to help you deal with your debts, and, in most cases, you can stay in your home. What happens will depend on your situation and the terms of your IVA.

Will an IVA put my home at risk?

Usually, no. An IVA is meant to help you avoid selling your home. But every IVA is different, so it’s important to check your agreement.

What is equity?

Equity is the part of your home that belongs to you. It’s the difference between what your home is worth and what you still owe on your mortgage or loans.

Equity is: your property value – your mortgage – any secured loans.
Example:

• If your home is worth £150,000 and you owe £100,000, your equity is £50,000.
• If you owe more than your home is worth, this is called negative equity. It means there’s no value available in the property.

Don’t worry if this sounds confusing. Your Insolvency Practitioner (IP) will work this out for you.

How does equity work in an IVA?

For IVAs approved after July 2025, equity is handled in a simple way.

• If your share of equity is under £10,000, your IVA will usually last five years. Your home isn’t normally included.
• If your share is £10,000 or more, your IVA will usually last six years. You’re not expected to remortgage or take out new borrowing.

This change was made to help protect homeowners.

If your IVA started before July 2025, equity may be checked near the end of your arrangement instead.

How is my home valued?

Before your IVA starts, your IP will ask for a property valuation and your latest mortgage balances.

They’ll take 85% of the property value, subtract what you owe and use the rest to estimate your share of equity.

Will I have to release equity?

Under the 2025 Protocol, you won’t be asked to remortgage or borrow more money. If your equity meets the limit, your IVA is usually extended by 12 months instead.

What if I own a home with someone else?

Only your share of the equity is counted. The other person’s share is not included.

What if I sell my home during an IVA?

Selling your home is your choice. You’re not usually required to sell it.

If you do sell, you may be able to offer the money as a Full and Final Settlement to end your IVA early. This must be approved by your creditors.

Many IVAs follow the IVA Protocol, but not all do. Some use different terms set by your Insolvency Practitioner. Always check your agreement or speak to your IP before making any decisions.

Renting during an IVA

If you rent, an IVA usually has very little impact on your tenancy. Your landlord is not normally told, and your rent is included in the budget you complete with us.

When applying for a new rental, some landlords may run a credit check. Being open about your situation can help.

Landlords and rental properties

You can still get an IVA if you own rental property, even if you own more than one.

You’ll need to show that the properties are affordable and provide a 12-month cash flow.

Selling rental property is usually avoided if it makes a profit or if selling would cause bigger problems.

What about my belongings?

You won’t lose everyday items. Creditors are not interested in things you need for daily life, such as:

• Furniture
• Clothes
• Household appliances
• Technology
• Children’s items
• Medical equipment

What assets must I tell my IP about?

You must declare valuable items, such as:

• Shares or investments
• ISAs
• Endowments
• Valuable jewellery or artwork

Creditors may ask for some assets to be sold. You can agree or refuse, but refusing could affect whether your IVA is approved.

Some assets are often protected, including pensions and life insurance with no cash value.

What about my car?

You can usually keep a car if it’s reasonably priced and you need it for work or family life.

If it’s very valuable, you may be asked to swap it for a cheaper one. You won’t be left without suitable transport.

Non-essential vehicles, like boats or caravans, may be reviewed.

Need advice about your assets in an IVA?

Get free debt advice online or call 0800 316 1833 to speak to one of our experts. Every situation is different, and we’re here to help.