Read Time 5 Minutes, 20 Seconds

An individual voluntary arrangement (IVA) is a formal procedure designed to allow those who are struggling with unsecured debts to create an orderly repayment plan.

You could write Off Your Unaffordable Debt

Failing to stick to the repayment plan for your IVA can result in your IVA  being declared as failed, however, did you know that hiding your money from an IVA is also a criminal offence?

In this guide we will explain what it means when you hide your money from an IVA, the repercussions and how hiding your money from your IVA can affect your IVA agreement.

Should I Hide Money from an IVA?

When you enter an IVA, this means that you are agreeing to pay an agreed figure each month based on your ‘Disposable Income’ after vital expenditures and reasonable living costs are taken into account.

The agreement lasts for usually 5 years during which time you have an obligation to keep the Insolvency Practitioner (IP) informed of any changes to your circumstances and your affordability. This means that your payments could rise and fall in line with your circumstances, affecting how much your creditors receive through the term of the arrangement.

It might be tempting not to declare all your money to the licenced insolvency practitioner whilst you are in the 5-year agreement, but to do so is a breach of the legal arrangement which has been formed with your creditors and not in the spirit in which they have agreed to receive a reduced return on what you owe them.   This could result in the IP petitioning for you to be made bankrupt and all your finances would be reviewed under bankruptcy if you were trying to hide your money.

Does my Insolvency Practitioner have the Right to Keep Checking my Finances?

Before you qualify for an IVA, you need to provide payslips and bank statements to your IVAs.  This means that the insolvency practitioner will review your bank account both at the beginning and on an ongoing basis.  You may think that this is an infringement of your privacy however, within your agreement they are allowed to keep checking your finances on a regular basis to see if there are any changes until your arrangement ends.

What Will Happen to me if I Hide my Money?

An IVA is something that is agreed upon by the court, so you are required by law to tell your IP if your circumstances change.  If you fail to disclose assets your IVA would be at risk of failure due to material omission from the proposal.  This would mean that you could be in a worse position than when you started with your financial difficulty.

As well as this, if your agreement ends up failing, you could be forced into bankruptcy.

Will I be Taken to Court if I Hide my Money from an IVA?

The simple answer is yes you could be.  An IVA is governed by the court and it is classed as fraud to hide money from them.  If you attempt to do this then you may be taken to court to resolve the dispute.  As a result, you may even need to assign a third party such as a solicitor to deal with the situation which could lead to extra legal costs.

You could write Off Your Unaffordable Debt

We helps people in the UK with their debts.


You could avoid bankruptcy


Help with your unsecured loans


Direct you to the best solution

What Should I do if my Finances Change during my IVA Agreement?

When your income increases or your expenditures decrease, you should contact your IP as soon as possible. They will carry out a review of your circumstances which

What if I have a Windfall Clause in my IVA?

If you are given a lump sum of money, your priority should be to paying your IVA debt, so instead of trying to hide the cash and risking going bankrupt, it is better just to pay the lump sum payment towards your IVA debt. Usually, there is a clause in your IVA agreement that means if you have an unexpected inflow of cash that you gain from winning the lottery or inheriting from someone, you will have to declare that windfall cash to your insolvency practitioner as soon as possible.  This will allow them to handle your finances accordingly for the benefit of your creditors.

If this amount is larger than your debt, then you will have to pay what you owe on your debts in full, plus the fees of your practitioner, and possibly any interest on your debt.  If this amount is less than your debt, all of it must go to paying your debt.

The only exception to the windfall clause is if the amount is under £500, it usually does not have to be paid to your IVA.

Can I Hide my Money Before an IVA?

People often think it is acceptable to hide their money before the IVA agreement as the legal document was only signed after, however, it is still illegal to do this and very difficult.  When an IVA agreement starts, your practitioner does a full financial health check of your assets and will most certainly find out about the cash or assets you are trying to hide.  In doing so, your practitioner will ask you to pay this towards your IVA.

Can I have a Savings Account During an IVA?

It is fine to save extra cash during your IVA.  The way that this is possible is by cutting your living costs and saving some money from there.

What does an IVA Failure Mean?

As well as not being honest about your financial situation when it comes to your IVA agreement, your creditors may stop considering your IVA agreement if you can no longer make the minimum payments agreed with your lenders and your creditors won’t accept any lower payments.  This means all your debts still stand and your creditors will take necessary action against you.  This is called a failure of your IVA.

You will still have to pay your Insolvency Practitioner fees for the services they have actioned so far.  When your IVA fails your practitioner can make you bankrupt, or your creditors will do it individually.  To avoid this happening to you, it is important that you stick to the agreement and pay the agreed payment.

It is important to remember that an IVA requires a lot of steps to ensure that this type of debt plan is right for you.  Before going through the process, an Insolvency practitioner will assess your situation to check your eligibility, so it is important to disclose everything to ensure you enter the right debt solution. If you choose to enter an IVA failure to ahead to the terms of the agreement could lead to the arrangement being terminated which may lead to a petition being made for your bankruptcy.

Share Me On

Start reducing your debt repayments and regain control...

100 11800