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Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. Borrowing over a longer term can mean paying back more in total.
An IVA (individual voluntary arrangement) doesn’t automatically put your home at risk in the way bankruptcy can, but many arrangements include a clause asking you to try to release equity from your home, often towards the final 6 months of the term, to increase what your unsecured creditors receive. Whether this applies to you, and what it involves, depends on the exact terms your creditors approved.
If you’re partway through an IVA and wondering what this means in practice, or thinking about how it could affect a future remortgage, the sections below cover what’s typically involved.
Is your home itself a debt included in the IVA?
No. Your mortgage is a secured debt, and an IVA is built around unsecured debts such as credit cards, loans and overdrafts. Your home isn’t “owed” in the arrangement the way an unsecured balance is. Instead, the equity you hold in it, the difference between what it’s worth and what you owe on it, can become relevant if your IVA includes an equity release clause. Our guide on secured and unsecured debt explains this distinction in more detail.
This is a meaningful difference from how your other assets might be treated in a more far-reaching insolvency procedure, and it’s one reason many people weigh an IVA differently from bankruptcy when a family home is involved.
The equity release clause explained
Many standard IVA proposals include a term requiring you to try to remortgage and release available equity towards the end of the arrangement, with the extra money going to your creditors rather than reducing your own mortgage balance. This is usually framed as an obligation to make reasonable attempts, not a guarantee that money will actually be released.
| What’s typically expected | |
|---|---|
| When it usually applies | Often in the final 6 months of the IVA term |
| What you’re asked to do | Try to remortgage to release available equity |
| Who benefits from the money released | Your unsecured creditors in the IVA |
| What happens if it isn’t possible | Some IVAs are extended, commonly by up to 12 months |
Because the details vary between arrangements, checking your own IVA paperwork, or asking your supervisor directly, is the only reliable way to know exactly what applies to you.
What if you can’t release equity?
There are several reasons a remortgage to release equity might not be possible: not enough equity in the property, an inability to meet a new lender’s affordability criteria, or wider market conditions at the time. If a genuine attempt has been made and it isn’t achievable, some IVAs are extended instead, commonly by up to 12 months, rather than treating this as a failure of the arrangement. Keeping a record of any applications made and their outcomes can help demonstrate that a genuine attempt took place.
If you think you’re heading towards this point, raising it with your supervisor early, rather than waiting until the clause is due, tends to lead to a clearer plan for what happens next.
Can you be forced to sell your home during an IVA?
An IVA is generally built around trying to release equity through remortgaging rather than a forced sale, and it doesn’t typically give a supervisor the power to make you sell your home outright. That said, the specific terms of your own arrangement set out what’s expected, so it’s worth reading them carefully or asking your supervisor to explain anything that isn’t clear.
How is this different from bankruptcy?
Bankruptcy works very differently when it comes to your home. On bankruptcy, your interest in the property can pass to a trustee, who has wider powers than an IVA supervisor, including the ability to force a sale in some circumstances if the case isn’t resolved. Our guide on what happens to your home in bankruptcy covers this in detail, and it’s a key reason many people weigh an IVA and bankruptcy very differently when a home is involved.
| IVA | Bankruptcy | |
|---|---|---|
| Your interest in the home | Stays with you | Can pass to a trustee |
| Typical approach to equity | A clause asking you to try to remortgage | Trustee may pursue the equity directly, including a possible sale |
| Forced sale | Not typical | Possible in some circumstances |
What this means if you want to remortgage during or after your IVA
If your IVA includes an equity release clause, remortgaging to meet it usually needs your supervisor’s agreement as part of the process, since the money released affects what your creditors get. Our page on remortgaging during an IVA explains what lenders and advisers typically look for at this stage, and our page on remortgaging to release equity after an IVA covers the position once the arrangement has completed.
If a fixed deal happens to end while your IVA is still active, our page on mortgage renewal during an IVA explains how that’s usually approached, and our guide on how long an IVA lasts sets out how the clause and any extension fit into the overall timeline.
Where to get help
If you’re unsure what your own IVA says about your home, your supervisor is the first person to ask, since terms vary between arrangements. If you’re worried about what might be expected of you, free and impartial advice is also available from MoneyHelper, StepChange and National Debtline.
Frequently asked questions
Will I definitely have to remortgage during my IVA?
Not necessarily. Many IVAs include a clause asking you to try to release equity, usually towards the end of the term, but if that isn't possible, for example because there isn't enough equity or you can't get a suitable mortgage, some IVAs are extended instead. Always check your own IVA terms.
Can my supervisor force me to sell my home?
An IVA doesn't usually give a supervisor the power to force a sale in the way bankruptcy can lead to. Most IVAs are built around trying to release equity through remortgaging rather than selling, though the exact terms depend on what was agreed and approved by creditors.
Does an IVA put my name on any register linked to my home?
An IVA is recorded on the Insolvency Register while it runs, which is a public record separate from the Land Registry. It doesn't place a charge on your home in the way a charging order does. See our guide on what is a charging order.
What if I have very little equity in my home?
If there's little or no equity to release, remortgaging to raise money usually isn't realistic, and this is something your supervisor should take into account. It's worth raising this early with your supervisor rather than waiting until the clause becomes due.