Can an IVA include council tax?
Yes. Council tax arrears are an unsecured debt, and arrears owed up to the date your IVA starts can be included alongside credit cards, loans, overdrafts, catalogues and other unsecured debts. Once your IVA is approved:
- The council becomes bound by the arrangement like every other included creditor;
- Enforcement action for included arrears must stop — bailiff visits, threats and collection letters for those debts end;
- Interest, charges and further fees on included debts are frozen;
- You make one affordable monthly payment covering everything;
- When the IVA completes (typically after five years), any remaining qualifying debt is legally written off.
One important boundary: your ongoing council tax — the current year's bill from the date the IVA starts — isn't included. That stays payable as a normal living cost, and your IVA budget is built to make sure you can afford it.
Why an IVA is powerful against council tax specifically
Councils are unusually aggressive creditors: they escalate to liability orders, bailiffs and wage deductions faster than almost anyone else you might owe. An IVA takes that entire machinery off the table for included arrears — not as a temporary pause, but for the life of the arrangement and beyond. For people juggling council tax alongside other debts, it converts a chaotic monthly scramble into one predictable payment.
Do you qualify?
An IVA could be a good fit if:
- Your total unsecured debts are over £7,000 (council tax arrears count toward this);
- You owe money to two or more creditors;
- You can afford a meaningful monthly payment — typically £100 or more — after essential living costs;
- You have a regular income (employment, self-employment or reliable benefits income).
If that's not you — for example your debts are smaller, or there's no spare income at all — a Debt Relief Order, payment arrangement or Section 13A application may fit better. We'll tell you honestly which applies: check if you qualify.
How the process works
- Advice call. We review your debts, income and outgoings and confirm an IVA is suitable. Free, confidential, no obligation.
- Proposal prepared. A licensed insolvency practitioner drafts your IVA proposal around what you can genuinely afford each month.
- Creditors vote. If creditors holding 75% of the voting debt value approve, the IVA binds all included creditors — including the council, and including any who voted no.
- You pay monthly. One payment, typically for five years (sometimes six). Your circumstances are reviewed annually.
- Completion and write-off. Remaining qualifying debt is written off and you receive a completion certificate. Fresh start.
The honest downsides
We'd rather you hear these from us than discover them later:
- Credit impact: an IVA is recorded on your credit file for six years from its start date, making credit harder and more expensive to obtain during that time. Once complete, you can begin rebuilding.
- Fees: IVA costs are charged for preparing your proposal and administering the arrangement for its full term — typically £3,650 in total, though creditors may adjust this when they vote. Costs are only recovered once your arrangement is approved, and they come out of the monthly payments you're already making — there's nothing extra to find.
- Commitment: five years is a long time, and if your IVA fails through non-payment, creditors' rights revive. That's why the monthly figure must be genuinely affordable — and why we build it around a realistic budget, not an optimistic one.
- Homeowners: if you own your home, you may need to attempt to release some equity toward the arrangement in the final year (you won't be forced to sell your home).
- Suitability: an IVA may not be suitable in all circumstances. Where it isn't, we may refer you to one of our trusted partners who specialise in alternative solutions.